Gold And Silver Prices May Turn Higher As Long-Term Treasury Yields Stagnate

With rates carving out a Descending Triangle, and the RSI sliding to its lowest levels in 2021, that path of least resistance appears skewed to the downside.

Breaching triangle support probably precipitates a downside move to challenge confluent support at the March 11 low (2.21) and trend-defining 55-EMA, with the neutral pattern’s implied measured move suggesting a pullback to 2.06% could be on the cards.

This scenario would be inherently bullish for anti-fiat assets. However, a convincing break above the triangle hypotenuse likely paves the way for a move to retest the yearly high (2.52) and ultimately leads to further downside for gold and silver.

Gold Price Weekly Chart – MACD Development Hints At Bullish Upturn

(Click on image to enlarge)

Chart prepared by Daniel Moss, created with Tradingview

The long-term technical outlook for gold remains bullish, as prices continue to carve out a Bull Flag continuation pattern and remain constructively positioned above key psychological support at 1700.

An impending bullish crossover on the MACD indicator also hints that a bullish upturn is afoot, given the two previous crossovers in January 2017 and October 2018 led to significant surges higher.

Ultimately, a weekly close above the 55-EMA (1769) is needed to validate bullish potential and bring Descending Channel resistance and the 1850 handle into focus. Clearing that probably signals the resumption of the primary uptrend and propels price back towards the 2020 high (2075).

However, should price fail to clear the 55-EMA, a retest of the yearly low (1678) certainly can’t be ruled out.

Gold and Silver Prices May Turn Higher as Long-Term Treasury Yields Stagnate

The IG Client Sentiment Report shows 82.35% of traders are net-long with the ratio of traders long to short at 4.67 to 1. The number of traders net-long is 3.00% higher than yesterday and 3.68% higher from last week, while the number of traders net-short is 8.37% lower than yesterday and 12.40% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.

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