Summary: Gold and Silver have formed top and reversal patterns. A correction seems likely to unfold over next few days
Gold ripe for a correction. Gold has formed a Bearish Engulfing top and reversal candle. Gold future shows identical pattern.
With the divergence on RSI (RSI is declining when asset price has been rising) the precious metal is ripe for a correction.
A correction should take Gold down to the 0.382 retracement at 19,55 but could drop to the 0.618 retracement at 1,897. However, 55 and 100 daily Moving Averages are coming up around that level providing some support.
Minor support at around 1,981. If taken out a short-term down trend has been confirmed.
If Gold can stay above the bottom of the Cloud bull trend is likely to resume after a correction.
For Gold to reverse this bearish correction scenario a close above the 2,050 is needed.
Gold has run out of steam short of all-time high and with divergence on Weekly RSI a correction should be expected.
Silver has also formed Bearish Engulfing candle indicating a top and reversal. Contrary to Gold there is no divergence on RSI suggesting Silver is likely to resume uptrend after a minor correction.
Nevertheless, a correction can take Silver down to the 0.382 retracement at around 23.70. If closing below Silver could dip to test 23.00 where the 100 and 55 daily Moving Averages are coming up providing support. However, a dip down to strong support at around 22.25 should not be ruled out.
To demolish and reverse this bearish correction scenario a close above 23.10 is needed.
Weekly chart Silver was rejected at the strong resistance area 25.85-26.46. Medium-term trend is still up but a correction is likely. Strong support at around 22.25 which is both the 0.618 retracement and the top of the Cloud.
Gold/Silver ratio is bouncing from support at around 79.00 after dipping down to the 0.786 retracement at 78.36 forming a bottom and reversal pattern.
A rebound should have energy to take Gold/Silver to the 0.382 retracement at 83.50 but a move up to 85 level where the 200 and 55 Moving Averages are providing resistance.
