The Chart of the Week: Gold and Silver, squeezing out the last drops? – FXStreet

  • Pressures metals in focus on a crucial week for commodity markets. 
  • Gold is embarking on a critical demand area.

In ongoing price analysis of the precious metals, gold, in particular, has been playing out as expected from a market structure perspective at least.

As can be seen from prior analysis, Gold Price Analysis: Bears finally catch a break, the price has behaved according to expectations as illustrated in the following chart drawn on the 28th of October:

In the prior analysis, in anticipation of an eventful continuation of the bearish trend, it was stated that ”it is reasonable to expect a pullback to the prior support structures, which are now expected to act as resistance.”

This was illustrated in the chart above where the green arrow preceding the bearish impulse is directed back towards the resistance structure and the combination of the 50% and 61.5% Fibonacci confluence. 

This price action has realized as follows:

Squeezing out the last drops?

Then, in a subsequent and additional analysis of the market’s volume profile, it was stated that demand in the $1,850s is expected to be critical for the future of the price of gold. 

If it proves robust, then there it could be a dead-end for the bears after squeezing out the last drops.

If it breaks, however, there is scope for a major downside continuation. 

Gold Price Analysis: Volume profile POC targets $1,720 / $1,840 

Meanwhile, the week ahead is full of critical events and the US Elections will be the focus for gold and silver traders, with both the Federal Reserve meeting and Nonfarm Payrolls playing second fiddle. 

Still, while volatility can be expected, for those trading throughout the events might wish to note the following potential opportunities from a technical standpoint for both metals. 

Staying with the gold as the first analysis, as explained, the price is expected to test the bullish commitments in the demand area of the $1,850s or even as far as the monthly 38.2% Fibonacci retracement of $1,836.

From a 4-hour perspective, the bears will want to see a break of $1,875 support structure from where a retest might be expected from which a sell limit order could be placed and triggered on the price action:

Silver Price Analysis 

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