Categories: Precious Metals
Topics: General Precious Metals

Buying Precious Metals On Pullback

Asset reflation is the talk of the town, with stocks, precious metals and commodities rising and bonds falling the past week.  While precious metals have enjoyed a good run, MACD readings are indicating that area patterns are being formed as a much needed breather is needed before resuming the trend.  For those looking to add on, buy back or to initiate positions in precious metals, it is important to be mentally prepared to buy Gold and Silver once they hit identified support levels.  We analyze these support targets in the charts below.

Gold has broken out from a continuation pattern over the past week or so, and the high MACD readings show that a correction is prudent.  The uptrend line that straddles the apex of the previous triangle pattern and the continuation pattern that ensued should be a good level of support, or about $1,020 to $1,025 per ounce.  This is validated by the 38.2% Fibonacci Retracement level.  If this support breaks, expect next support to be at $1,000-$1,010 per ounce.

Meanwhile, Silver’s momentum looks a little weaker, but it should find support near $16.30 to $16.50, validated by the previous channel’s resistance (turning to support) and 38.2% Fibonacci Retracement level.

We would suggest slow accumulation when these precious metals hit these levels and volatility dies down.  The probability that support levels hold are high given that the uptrends are quite fresh, and given inflation signals across asset classes.

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Carter Thompson