I am a huge fan of gold and I look at this instrument almost every day. Silver lives in its shadow, but that does not mean that I ignore this asset. I most recently analysed this metal on Friday, as the technical situation was very interesting. My price action approach was telling me that we are very close to a major buy signal. The new week started very well, so our view from Friday was spot on. See for yourself:
“The situation looked dramatic but buyers managed to create a reversal, which is drawing a right shoulder of the Inverse Head and Shoulders pattern. The price closing a day above the yellow area, will be a strong buy signal.”
The yellow resistance mentioned above was broken on Friday as the price managed to close the week almost 10c above that area. The yellow horizontal line was not the only resistance that got broken at the end of the week. There were actually quite a few of them! First, let me mention the two red lines, which were the borders of the symmetrical triangle pattern. What is more, silver broke the black mid-term downwards trend line and came back above the long-term blue up trend line. Quite a lot for one day, huh?
With all this in mind, sentiment has to be positive. Buyers managed to break all major resistances using only the small inverse head and shoulders pattern (grey area). The buy signal remains ON as long as the price is above the yellow area. The aim for the new upwards wave is the top from the 31st of January. Chances that we will get there are pretty high.