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GOLD (XAUUSD)
Dominant bias: Bearish
Gold started a persistent bullish journey a few weeks ago, and this has proven strong enough to threaten the current bearish market bias. Should things continue for the next few days then a new, clean “buy” signal will result and, in turn, lead to a Bullish Confirmation Pattern in this market. Pullbacks are possible this month, but if price goes above the resistance level at 1155.00 then bearish positions will no longer make sense. There are support levels at 1110.50 and 1080.50 which have the potential to limit the significance of any pullbacks.
SILVER (XAGUSD)
Dominant bias: Bearish
Unlike Gold, Silver has not rallied in any noteworthy way. Instead, price has been consolidating over the last few weeks, and there is nothing to pose a threat to the extant bearish outlook for this market. Momentum is bound to rise during February so price may rise or fall sharply. A significant rally is more likely if Gold continues upward and acts as a catalyst for a bull run on Silver (quite logical as both pairs are positively correlated in the main), inferring that a serious pullback in Gold will cause Silver to fall even further. If price drops then the support levels at 13.6100 and 14.0000 may be tested, while a rally may target the resistance levels at 15.1000 and 15.5000.
Azeez Mustapha
Currency Analyst
Tallinex Limited
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