Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

Gold and Silver Forecast: Extreme Scenarios in Sight

Article By: ,  Market Analyst
June 24, 2024 9:23 AM
  • Gold is retesting the lower border of a channel respected since October 2023
  • Silver is retesting the mid-level of a channel respected since October 2023 
  • Gold Futures are flagging a decline in bullish volumes

What is a Bull Trap?

A bull trap occurs when the trend breaks out of a significant resistance level, luring bull traders in with a temporary price increase, only to steeply reverse back to the initial breakout level. Underlying reasons to get caught in bull traps include non-confirming momentum and volume indicators along the trend. These traps commonly occur in sideways ranges.

What Does This Have to Do with Gold and Silver Charts?

The steep bull trend of gold and silver charts last week, breaking back above levels 2340 and 30 respectively, faced a steep drop on Friday to wipe out weekly gains, dropping back towards Monday’s price range.

What’s Next for the Metals?

With the summer season here, the charts show a bias towards sideways movements. The charts between May and June indicate that consolidations are dominating the analysis.

Gold and Silver Forecast: Gold Futures - Weekly Time Frame - Logarithmic Scale

Unlike XAUUSD, gold futures failed to trace a significant new high in May, forming a resistant ceiling with the chart, along with a decline in bullish volumes.

What Does That Mean for XAUUSD?

Confirmation is needed to establish bullish scenarios

Gold and Silver Forecast: XAUUSD - Daily Time Frame – Logarithmic Scale

Gold is currently retesting the lower borders of a respected and up-trending parallel channel since October 2023. The latest consolidation between May and June left an indecisive forecast for the yellow metal.

Bearish scenario: a confirmed drop below the respected channel and the 2270 low can dominate a bearish trend towards the key level of 2150. This level aligns with the potential first wave spike of December 2023.

Bullish Scenario: a confirmed break above resistance levels 2410 and 2460 can meet the next potential resistance at the 2500 zone.

GOLD and Silver Forecast: XAGUSD - Daily Time Frame – Logarithmic Scale

Silver has been trading within a declining range from the May 2024 highs, possibly forming a flag pattern. However, without confirming volume and momentum, breakouts beyond key levels are needed to confirm the following trend.

Bearish Scenario: a confirmed break below 28.50 can drag silver to the lower end of its primary trending channel, aligning with the previous wave 1 top at the 26 level.

Bullish Scenario: a confirmed break above the resistance levels 31.50 and 32.50 can support silver’s uptrend towards the upper end of its up-trending channel, targeting the next potential resistance level at the 35 zone.

The economic calendar’s indicator of the week is the Fed’s favored inflation gauge. The market is looking towards easing data in alignment with the Fed’s inflation rate target.

Until the fundamentals play out, the mentioned key levels with their confirming momentum and volume indicators can pave the way.

 

--- Written by Razan Hilal, CMT

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2024