The precious metals bounce since Friday still lacks that little bit of spark for now

After the modest gains yesterday, we’re seeing precious metals cool off a little in trading so far today. After a setback late last week, there was a notable bounce from the lows especially in silver. The precious metal itself is up 27% from its Friday low near $64 but the bounce we’re seeing since remains tentative at best.

There are some positive signals on the charts but they’re not entirely convincing just yet. Let’s take a closer look.

In the case of gold, we’re seeing price continue to keep above $5,000 and that is encouraging. That especially also as price managed to hold a daily break above the 50.0 Fib retracement level of the sharp pullback in late January to early February at $5,002. As such, that’s another positive development for dip buyers at least.

Still, there seems to be some resistance closer towards $5,100 for now and that is limiting gains as we saw yesterday too.

However, keep above both the key hourly moving averages and buyers will still be in with a shout to try and turn the bounce into a more meaningful rebound.

As for silver, dip buyers look to be holding some caution in pushing further on the week. We’re seeing price action hug the 100-hour moving average (red line) for the most part now after the Friday bounce.

In keeping above the key technical level as well as the $80 mark, dip buyers will feel that they have something to work with on the charts. However, the recovery bounce still lacks that little bit of oomph or a spark. The 200-hour moving average (blue line), now seen at around $89.25 will be one to watch in trying to solidify any further technical advancement higher.

But in the bigger picture, I’d be more comfortable in seeing price at least push past the highs last week closer to $92.20. At least in doing so, that will invalidate the potential for a lower highs, lower lows pattern to develop. So, just be wary about that.

Looking out to this week, key US economic data releases are going to be major drivers of trading sentiment. And they don’t come bigger than the retail sales, non-farm payrolls, and inflation numbers. All of that is going to feature in the next 80 hours or so from this point.