Oh how the mighty have fallen!
Gold has come along way from its 2011 bubble peak, clearly changing to a bearish trend and falling all the way back down to this area of weekly interest where we have seen some signs of ranging price action starting to form.
Although the range means that price isn’t breaking lower, the fact we are in a bearish trend makes the lack of bullish bounce much more important.
The daily really highlights this lack of power by the bulls in Gold, with the most recent bounce only managing to form a flag back up to short term resistance before being sold off hard in a perfectly technical manner.
Gold has found short term support at its most recent swing low but all the higher time-frames are pointing to continued downside. And we haven’t even mentioned the Fed!
So what about little brother, Silver?
I’ve tried to draw the same lines to highlight just how correlated the two are and even surprised myself at how closely I could line them up!
Silver does however show a much clearer low. The fact that the shorter term daily support level lines up with the weekly level is huge for traders looking to use the zone to manage their risk around.
The fact that the Silver support zone is a lot tighter just adds to the appeal of trading this zone in Silver over Gold.
Do you see opportunity trading Commodities on MT4 with Vantage FX?
Dane Williams – @VantageFX
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