A key reversal day in Gold, when prices open Gap up and then sell off to close lower. This at 78.6% near 1322, of the entire decline for the second half of 2016. Also at the upper end of the rising channel shown on the chart. This bar pattern is a classic and so this resistance is important for now. The lower end of the channel at 1288 is the next support and we may test that Below 1288 we consider it a larger reversal but till then the odds should favor the trend higher.
Silver Mcx prices stalled at the upper end of the falling channel from the 2016 top. Unless we breakout above 40400 we are completing wave X and wave Z down for silver will be the last phase of this decline. While it is not mandatory that wave Z go to the lower end of the channel again as wave Z can truncate earlier, it is open to it. The averages near 38650 are the initial support zone, and the lower end is at 34570.
Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd