Two weeks ago, metals were posting new highs for this year. Gold was about to touch 1300, while Silver spiked all the way to 18.60.
We published an article, warning late buyers who were interested in buying those metals at their highest level of this year. In this article, we noted that traders need to be aware that a correction is highly possible after multiple weeks of gains and breakouts.
Since then, Gold and Silver has been declining gradually, losing more than 5% of this year’s gains. Gold declined all the way back to 1216, while Silver dropped back to $16, reaching our entire targets for that correction, mentioned in the previous reports.
Is The Correction Over Yet?
In terms of the technical analysis, there two ways to look at the recent declines. The negative point here is that both metals broke their daily uptrend line, which eases the bullish outlook for this year. However, the bullish outlook remains if both metals are trading above December’s lows, which stands at $15.60 for Silver and 1120 for Gold.
At the same time, Gold and Silver has been since yesterday right from a technical support level. Silver bounced back from November’s support area at 16.12, while Gold bounced off January’s resistance, which so far remains a solid support.
Therefore, the current bounce might be another correction before the downside pressure resumes. Or, this bounce might be a continuation of this year’s bullish trend. However, both metals are required to prove their bullishness by rebounding above the broken uptrend.
Read more: https://www.orbex.com/blog/2017/05/precious-metals-update-correction/