Precious Metal Weekly Outlook – 5th June – SMI

Posted By : Kishore B.S

Hi Friends !!!!

Precious Metals Outlook for the week…..

GOLD:

Gold has been in the continuous upmove for the last one year scaling up from the price levels of 22000 to the current price of 30000 giving a whopping returns in excess of 30% thereby distinguishing itself as one of the best performing Assets in the world.

The appreciation of the price has left many spellbound and shocked and the rally has been fueled majorly with the Shrinking Economies across the Globe and also the increasing demand for the US treasuries and shift to Safer havens in the form of the Yellow metal gaining more focus.

The demand from most of the ETFs and Central Banks of Various Countries in order to issue further currencies or back their Economies too is creating lot of demand for the Yellow Metal.

With this backdrop the weekly charts above are indicating that the rally might further continue if the price level of 28800 is held in the next 2-3 weeks with likely target of 31660-32890 in the next 2-3 months. The targets seem possible with the rumours of QE by various economies and also the uncertainty prevalent in the Global Arena.

On the bearish front a break below 28740 would negate the positive sentiments and the ensuing profit booking and correction could easily take the  yellow metal to the price levels of 27600-27000, where huge support would support it further falling.

 

SILVER :

Silver has been range bound for the last fortnight with the price momentum between 52000-55000 giving a very good trading opportunity to both the bearish and bullish investors / traders. The lack of demand witnessed similar to Gold can be attributed as the main reason for the lack of buying demand for the this metal.

The drifting Chinese Economy coupled with demand for most of the Exports from china, with the surge in production during the last year has contributed to the increase in huge supplies in the Global markets, thereby keeping a Tab on the prices from increasing above the 60000 mark during the last few Quarters.

The charts of Silver above 2 trends, the longer trend being the Bearish downward channel trendline which has not been breached for the last 3 months and in this Channel trendline a Small Bullish flag pattern has been forming which would be confirmed with the breakout above the 55000 price level, with likely target of 56200-56400 level.

However the Flag breakout also co-incides with the breakout of the Downward channel line as well augmenting the Bullish sentiments and the likelyhood of target being accurate and correct.

On the flip side a failure of the metal to cross the 55000 mark could be used to create fresh short positions with stoploss of 55200 and target of 53200-52400 in the days to come.

 

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