Gold and Silver Outlook: Bearish Reversals Signal Further Downside

Gold and silver prices are turning lower after bearish reversal patterns emerged across both metals, with fading safe-haven demand and a firmer US dollar weighing on prices. Gold’s failed breakout above 4900 has shifted focus towards key support levels, while silver is showing similar technical weakness.

Positioning is also softening, reinforcing a bearish near-term bias. Any short-term bounce may provide opportunities for sellers to re-enter if resistance holds.

View related analysis:

Gold Rally Fades as Safe-Haven Demand Eases

My mid-April view that gold’s rally was running out of steam proved on point, with the metal topping out on April 17. Prices were already tracking towards a fourth consecutive weekly gain, but the daily chart had turned choppy, with overlapping candles and limited progress compared to the strong move seen earlier in the month.

Following a failed breakout above 4900, downside momentum accelerated on April 21 after Iran skipped highly anticipated ceasefire talks. However, President Trump extended the ceasefire regardless, effectively removing a key geopolitical risk premium. With safe-haven demand fading, gold has continued to trend lower since.

Source: LSEG

Gold Futures (GC) Technical Analysis

Bearish Reversal Pattern Signals Lower High
The US dollar’s rebound on Monday weighed on gold, which printed a prominent bearish outside day. It also marks the third candle of a 3-bar bearish reversal pattern (evening star), likely confirming Friday’s doji as a lower high within the broader downtrend. The move stalled just shy of the 4700 handle and monthly pivot point.

This brings the 200-day EMA (4406), near prior swing highs and lows, and the 200-day SMA (4355) into focus as initial downside targets. Longer-term volume point of control (VPOC) levels also sit at 4306 and 4180 should the 200-day averages give way.

Key Support Levels and Bounce Scenarios to Watch

The presence of multiple support levels above 4000 raises the possibility that gold could be forming an important swing low above 4100.

On the 4-hour chart, prices held above the weekly S1 pivot, with a small inside bar into the US close hinting at demand around current levels. This opens the door for a minor bounce in Asia or later today, which could provide an opportunity for bears to fade strength—seeking signs of a swing high and a move towards the monthly S1 pivot near 4461.

Source: COMEX, TradingView

Silver Futures (SI) Technical Analysis

A swing high also appears to have formed on the silver daily chart, with Monday’s bearish engulfing candle forming the 2-bar bearish reversal pattern – dark cloud cover. The fact it formed at the 20-day EMA and just below the 50-day EMA adds wright to the near-term bearish case, as does the bearish clues on the gold daily chart.

Bears could target last week’s lows and the $70 handle while silver prices remain beneath Friday’s high (77.52), or seek to fade into retracements within Monday’s range while prices remain beneath the weekly pivot point.

Source: COMEX, TradingView

Gold (GC), Silver (SI) Futures Positioning | COT Report

While traders remain net-long gold and silver futures, positioning is low by historical standards and has been trending lower alongside prices. Net-long exposure also peaked well over a year ago. Notably, gross-short exposure to gold is rising among large speculators, while activity in silver suggests traders are gradually stepping away from the market.

If large speculators are correct in increasing bearish bets on gold, it could spell further downside for silver, which typically tracks the yellow metal.

Source: CFTC (COT), COMEX, LSEG

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of StoneX Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor