Gold/silver market summary for week of November 11: This time last year, the next big selloff in gold began as it failed to maintain at the $1800 price level. This came on the heels of bullish momentum through much of 2012 as investors continued piling into gold on the heels of quantitative easing. In the following months and into 2013, gold continued to be hammered as investors began shifting from safe-haven assets to equities on the expectation that the economy was recovering. Once gold dropped below a key support level of $1525 though, the selloff only intensified.
Looking at technical charts, it’s expected by many that gold will continue seeing some weakness due to improving economic indicators like employment, which fuels speculation that the Fed will withdraw its stimulus. After failing to hold the key support of $1360, gold slid another $50-$60 to end last week around $1300. Higher prices are possible if the metal is able to hold at the $1360 resistance level. In this analysis, Sharps-Pixley believes uncertainty leading up to the debt ceiling debate in February will provide a big boost for gold. Their medium term target (1-3 months) out are bullish, and estimate the price to hit $1408
Silver seems to be in a better position according to this analysis – while silver could continue to pull back after a strong rally at the end of summer, a tightening “Bollinger band” indicates to Sharps-Pixley that a bottom may be near. If silver is able to break above its upper resistance level of $23.05, we could see more upside. As of this writing, silver is sitting below the $21 support level. In the months ahead though, Sharps-Pixley thinks we could see a rally to around $23.65 (1-3 weeks out) and $26.45 (1-3 months out).