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GOLD (XAUUSD)
Dominant bias: Bearish
Gold topped out at 1307.35 during 2015, later reaching a low of 1046.21. Price was engaged in a persistent downtrend that trapped bulls with short-term bullish movements, so it is completely irrational to open long trades in this market because the bears have really been making their presence felt for a long time. In fact, 2013, 2014 and 2015 were all strongly bearish, which explains why the “Thanksgiving effect” did not take place in those 3 years. Since this market currently favors sellers, it would be sensible to focus on short trades by using upward bounces as opportunities to enter the market - especially when bearish candles form following a bounce.
SILVER (XAGUSD)
Dominant bias: Bearish
Just like its Gold counterpart, Silver has been in a persistent downtrend since 2013. In this kind of market, the best trading approach is to ignore bullish signals and capitalize on bearish signals. However, using Bullish signals as chances to enter short at better prices offers lower risk while the long-term bias remains bearish. Last year, price reached a high of 18.4500 and a low of 13.6100 - a low that could be surpassed this year. At this time, rallies should be viewed with suspicion until a “Golden Cross” occurs - price closes above the EMA 200 on the daily chart while trending upwards. This will indicate that the bearish trend is over.
Azeez Mustapha
Currency Analyst
Tallinex Limited
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