Summary:
- Gold gains after Trump’s decision to levy additional tariffs
- Silver remains above the upper limit of the Ovebalance structure
Volatility on the market spiked due to Trump’s decision to impose 10% tariffs on Chinese goods worth $300 billion. Significant price moves could have been observed on most markets yesterday. Gold gained 1.2% yesterday and silver ended the day 0.14% higher. Let’s look at the charts. In the case of gold, yesterday's session ended with a gain. The first half of the session was driven by the supply-side, but after 3:00 pm BST the market resumed the previous trend. Maximum volatility could have been spotted in the evening at the time of Trump’s announcement. Gold also saw upward momentum accelerate at that time. Closure of the daily candlestick hints at the possibility of extending upward move. The market may be trading lower today but keep in mind that as long as the price holds above the $1411 handle, upward trend remains the base case scenario. Currently, bulls try to halt decline in the vicinity of $1438 handle, from where another upward impulse could begin. Note that in spite of the brief consolidation the market reacted to the internal trend line - another sign supporting upward scenario.
Source: xStation5
Looking at the silver prices, one can see that the key support was defended. Despite dipping below the $16.15 handle, the price reacted to the lower limit of the Overbalance structure. Today, the price zone around the $16.15 handle is being tested again. However, a long lower wick of the Thursday's candlestick, hints at bulls looming in the vicinity of the zone.. Over the long-term silver could rally to as high as $17.15, where the highs from April and June 2018 are located. The upward trend will be invalidated only when the price breaks below the red rectangle
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Source: xStation5
Moving to a lower time frame, one can see that the lower limit of the Overbalance structure has been defended. The market reacted yesterday to exactly the same level as the previous correction move. As long as the price is above, the trend remains upward. Invalidating the setup could lead to a move towards the support level at $15.5. Currently, the nearest local resistance to watch is the $16.33 handle, where the 60-period moving average can also found.
Source: xStation5
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