Commodities Brief: Gold edges higher, Silver remains in narrow range

FXstreet.com (Barcelona) - The precious metals were higher today as gold finished up 1.2% at 1425, while silver remained in a narrow range to close up 0.21% at 23.35. The last 4 days correlation between the two has seemed to decline as gold continues to edge higher, while silver seems to be stuck in a sideways consolidation. Given the reaction to the China GDP number last week, it will be important to keep an eye on China HSBC PMI due out later in the session at 1:45 GMT.

From a technical perspective, both the daily charts of gold and silver seem to be forming consolidation patterns which should be resolved in the next few days. The gold chart continues to look like a “bear flag” continuation pattern, which would be confirmed with a close below 1408 and has eventual measured move targets price targets all the way down near 1170. A close above the upper boundary of the flag pattern (apx 1445) would negate the bear flag pattern and could open the door to higher prices near next resistance at 1470.

The silver daily chart looks to be forming a “pennant” continuation pattern. The key will be to monitor the upper (24.00) and lower (22.80) boundaries for keys to the next move. Should the pattern be resolved to the downside it has a measured move target of apx 20.89. Consquently, should the continuation pattern fail and resolve to the upside it has measured move targets near 26.00