Gold and Silver hit target as AUD gains

XAUUSD, H4                  

Yesterday I wrote “Technically Gold and Silver formed Fractal Highs last Monday (February 27) following a weak Wednesday. This was followed by significant declines and closes on Thursday (March 2) with a breach and break of the (20 day moving average) on Thursday. Friday was positive but the week closed below the 20 day moving average.  Short positions were taken on both Gold and Silver this morning on the 4 hour charts at 1234.00 and 17.84 respectively.   

Gold; the Daily chart has 200 day moving average support at 1232 so this could prove strong resistance  to a move lower and target 1 at 1225.00. MACD and parabolic SAR are negative and RSI at 51 is neutral but showing signs of weakness. The 4 hour chart also remains below the 20 period moving average, has negative RSI (39) and MACD. The Parabolic SAR turned positive on Friday. Target 2 is the lower Bollinger band and 14 period ATR on the daily chart at 1217.25.  A break of 1245.00 would be required to turn Gold positive again.      

Silver looks a little bit more vulnerable and volatile than Gold and target 1 is the 4 hour 200 period moving average and recent daily low at 17.70.  Target 2 is the break of the 4 hour fractal low and Daily 50 period moving at 17.40. RSI, MACD and the parabolic SAR all remain negative on the 4 hour chart. A break of 18.05 and the 50 period moving average would suggest a significant retrace of the large move on Thursday (March 2) could be possible.”

Both commodities fell away to target 1 yesterday, with a $9.00 (-0.73%) reverse for Gold (equivalent to 900 pips) and a $0.14 reverse for Silver (equivalent to 14 pips or 0.78%) for total net gain of 914 pips. Target 2 remains in place for both Gold and Silver at 1227.25 and 17.40 respectively as discussed in yesterday’s analysis.

The AUD has gained some friends over night after the Reserve Bank Of Australia left rates unchanged at 1.5% but delivered an upbeat statement which saw the AUDUSD rise over 0.5% to 0.7631 before find a floor at the 50 day moving average at  0.7576. Next support is at the 200 day moving average around 0.7510 with an upside break of 0.7678 required for a sustained move higher to 0.7700 and beyond.

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Stuart Cowell

Senior Market Analyst


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