Here Are The Key Gold And Silver Levels To Watch
After a strong performance in the first-half of 2020, gold and silver have stumbled since early-August as a result of profit-taking and U.S. dollar strength. Gold has fallen by approximately $200 per ounce to just under $1,900 (a 9.5% decline), while silver has fallen by over $6 per ounce to $23.49 (a nearly 22% decline). Despite precious metals’ weakness over the past two months, basic chart analysis shows that the uptrend is still intact for the time being.
Gold’s daily chart shows that it is still above the $1,800 support level that formed an important resistance level from April to July. If gold remains above $1,800, it would be a sign of strength. There is also a downward-sloping resistance line that has been in-play since gold peaked in early-August; a convincing push above that resistance would give a bullish confirmation signal.
Gold’s weekly chart shows that the uptrend that started approximately two years ago is still intact:
Silver’s daily chart shows that the metal has pulled back to its $22 support level and is holding that level, which is a positive sign.
Silver’s weekly chart shows the importance of the $20 to $22 support zone going back as far as 2016:
For now, it appears that gold and silver are simply taking a breather after their powerful uptrend of the past two years. Of course, the key support levels discussed in this piece should hold in order for the most recent phases of their uptrends to remain intact. Precious metals and other safe-haven assets have benefited greatly from the extremely aggressive monetary policies launched by global central banks since the coronavirus pandemic began earlier this year. There appears to be no end in sight for those unprecedented monetary policies, which should help keep a bid under precious metals for the foreseeable future.
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