{"id":15729,"date":"2010-11-22T10:00:15","date_gmt":"2010-11-22T15:00:15","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=15729"},"modified":"2010-11-22T10:00:15","modified_gmt":"2010-11-22T15:00:15","slug":"gold-silver-play-exhausted-dollar-testing-breakout-level-in-forex-trading","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/11\/22\/gold-silver-play-exhausted-dollar-testing-breakout-level-in-forex-trading\/","title":{"rendered":"Gold & Silver Play Exhausted? Dollar testing breakout level in Forex Trading"},"content":{"rendered":"

By Chris Vermeulen, TheGoldAndOilGuy.com <\/a><\/strong><\/span><\/h4>\n
\n

The past few months it seems the gold and silver play has been getting a little crowed with everyone wanting to own gold. While I am a firm believer that these precious metals are a great hedge\/investment long term, I can\u2019t help but notice the price action and volume for both metals which looks to me like they are getting exhausted.<\/p>\n

Silver \u2013 Daily Chart<\/strong>
\nThe silver chart below shows an extremely high volume reversal candle in early November which typically leads to lower prices and some times a major change in the trend. That being said silver remains in an uptrend with the possibility of a bullish pennant forming. On the other hand there is a possible head and shoulders pattern forming. I will be looking for light volume sideways chop keeping a close eye for a possible neckline breakdown or a momentum thrust to the upside for a possible trade.<\/p>\n

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Gold \u2013 Daily Chart<\/strong>
\nGold is forming a bullish and bearish pattern also giving us a mixed signal. I am currently neutral on gold and not really looking to take part until we get some type of clear price action.<\/p>\n

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US Dollar \u2013 60 Minute Chart<\/strong>
\nThe dollar has shown some strength recently. The US dollar play has been to take the short side, and a couple weeks ago we saw the dollar breakdown from yet another consolidation. It seems like everyone shorted the dollar yet again. That could have been a key pivot low for the dollar. On the weekly chart that bounce was off a major support trend line helping add some fuel to the rally I would think.<\/p>\n

The chart below shows the recent rally and breakout to the upside. Currently the dollar is pulling back to test the breakout level (support). It will be interesting to see how this week unfolds. If the dollar bounces then we just may see metals break below their necklines to make another heavy volume drop.<\/p>\n

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Weekly Precious Metals Update:<\/strong>
\nIn short, I have mixed feelings for gold and silver. Yes I think they are good long term plays, but after the run they have had it is also very possible a much deeper correction is about to take place and we may not see new highs for another year. That is a long time to have money sitting in an investment when it can be put to work in other investments. I know the herd (general public) is all head over heals in love with gold and silver which is one of the reasons why I think we are nearing a top if we didn\u2019t already see it a couple weeks ago.<\/p>\n

Don\u2019t get me wrong I\u2019m not saying to sell of go short metals\u2026 not yet anyways. They are both still in an up trend but some interesting things are unfolding which could cause big action in the coming weeks.<\/p>\n

Join my trading newsletter and get my ETF trading signals, daily analysis and educational material: www.TheGoldAndOilGuy.com <\/a><\/h4>\n

Chris Vermeulen<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The past few months it seems the gold and silver play has been getting a little crowed with everyone wanting to own gold. While I am a firm believer that these precious metals are a great hedge\/investment long term, I can\u2019t help but notice the price action and volume for both metals which looks to me like they are getting exhausted.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15729","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/15729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=15729"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/15729\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=15729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=15729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=15729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}