Commodities are breaking out higher. Gold leads the precious metal space, followed by Silver. However, our core focus remains on Silver on a risk-reward basis. Besides Platinum, they are too threatening a breakout higher. The exciting fact is that Gold and the dollar are breaking out at the same time.
Gold: After plating a base at $1676, the price action was finally done through the 4-month key resistance at $1834; as per the A-B-C pattern, $1870 and $1906 are the following destinations. Last week’s high was $1869, focusing on $1906 and $1916 on June 01, 2021.
A decisive breakout above $1906 would allow for stretching its arms to $2156. Flips side support exists at $1833, $1810 below here $1758.
The silver story is in line with its master, i.e., Gold. The inverse H&S pattern Cleary is evident on the daily chart. Last week’s breakout through the next indicates $26.50 and $27.10 before flying to $28.50. When talking about Silver, we aim for a longer term as it is the most underrated precious metal.
On Friday, the price action stopped at 200MA; we believe it is a technical stop before taking a next leg higher.
There is clear evidence on the monthly chart of our longer-term decision. i.e., a Golden crossover pattern. Readers have no introduction to this mega bullish pattern while talking about the monthly, not daily chart. Hence, we will see $40, $44, and $50 in the coming months.
A breakout above $30 would raise the probabilities to these targets.
Coming to the Platinum, the price produced a decent breakout through A point but could not close strongly. As per the A-B-C pattern, the price could extend the journey towards $1160. Please note that the 200-MA exists at $1105. Supports at $1058, $1010 and $989.
On the other side of the planet, the euro and the pound are bleeding against the dollar. We wouldn’t be surprised by the euro downfall, which we have been expecting. However, we didn’t pencil on the pound fall against the dollar lately.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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