RSI Turning Higher
The run-up in gold this morning has price action testing the downtrend line from the September high for the fourth time. Gold has been forming a bull flag for the past eight weeks, and $1505 also coincides with the 38.2% Fibonacci retracement from the September high to the October low. Bulls want to see a breakout here; a failure would likely weigh heavily on price and take gold to new multi-month lows at downtrend support. RSI is supporting bullish action and is breaking out of its multi-week downtrend. The bond market is also acting bullishly after cooling off recently, as highlighted in my analysis of TLT, which is also supportive of higher gold prices.
A gold breakout here should see gold test $1528 on the next leg higher.
Silver is also pushing up from its downtrend lines. Bulls wants to see silver drive through $18.02 above the 38.2% Fibonacci retracement to set up another push to $18.70. Like gold, the RSI for silver is just now turning up, signaling renewed strength following the multi-week pullback.
- October 24, 2019
- By Tarek Saab
I am the founder of fibonacci.com and an avid trader. I am also the co-founder of Texas Precious Metals, a top US precious metals company. In 2006 I was a contestant on The Apprentice with future president, Donald Trump. I live in Texas with my wife and five children, where I spend my time dodging snakes, changing diapers, and charting.