Gold was steadier in early trade this morning following yesterday’s sharp sell-off. This marked the fourth consecutive negative session for gold. This has helped to dampen the bullish sentiment which had built steadily over the last quarter of 2023. Despite this, gold continues to trade above the key area of support between $2,000 and $2,010. If it can manage to hold over this level, then there’s a good chance that we will see renewed optimism and a build of positive momentum. Looking at the daily chart above, we can see that some negative divergence has been developing since gold began its rally back in October last year. This could suggest some additional weakness to come, and the possibility that key support could be tested over the next few weeks.
As a side note, silver continues to look vulnerable. It has been unable to stage a recovery since it began its latest sell-off just before Christmas. Every attempt at a rally has run into a flurry of selling, and this is contributing to a wave of negative sentiment. Silver looks as if it will continue to struggle to make gains until it finds a strong level of support. Chart-wise, it’s difficult to establish where that may be. But traders will be mindful of its break below $21 in early October.
As a side note, silver continues to look vulnerable. It has been unable to stage a recovery since it began its latest sell-off just before Christmas. Every attempt at a rally has run into a flurry of selling, and this is contributing to a wave of negative sentiment. Silver looks as if it will continue to struggle to make gains until it finds a strong level of support. Chart-wise, it’s difficult to establish where that may be. But traders will be mindful of its break below $21 in early October.