Perhaps you noticed that Gold (XAU/USD) and Silver (XAG/USD) are slowly but surely showing signs of growth. During this year the golden metal grew by +13% in value and silver improved by +6%.
In fact, this article will show that both Gold and Silver could end 6 year corrections if they break above $1300 and $17.50.
Time for a closer look what to expect next in the upcoming weeks and months. (The video of this article is at the very bottom)
XAU/USD is challenging the resistance trend line (orange) that has been valid ever since the peak of Gold in September 2011 and its pullback in October 2012.
A break above this resistance point could indicate two major signals to the market:
Price is already above the trend line but has to confirm the breakout which it can do by:
On the daily chart price seems to be ready for a bullish breakout as Friday’s daily candle show a major bullish reversal in intra-day trading. This created a large wick on the bottom of the candle.
Here are my thoughts how to tackle it:
Gold’s ugly duckling seems to be ready for a recovery. Although Silver (XAG/USD) declined in value a lot more than Gold did since 2011, Silver is also showing potential for a bullish breakout.
Here are the key ingredients that support such an upside move:
XAG/USD will still need to confirm the reversal by breaking (blue arrow) above the resistance trend line (red). The bullish break will need to break above the moving averages and previous top, plus round level at $17.50, which could trigger a breakout towards the next resistance trend line (dark red) at the round level of $20.
Many green pips,
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