FxWirePro: XAU and XAG intermediary upswings unlikely to sustain - slides underway

Despite the red flag for far month contracts popping up, we could envisage precious metal gains for next 1M or so. This is mainly because of speculation that is lingering around fed's meeting on rate hike decision. 

Otherewise, we don't think prevailing price bounces to sustain in long run, see gold and silver struggled and rejected to break out strong resistance at 1191 region and 16.30 levels respectively on monthly charts.

We will be bullish only above convincing break these levels on monthly charts. Although both weekly and monthly RSI oscillators signal bullish convergence to approach this level we are not carrying adding longs without a decisive break out at above mentioned levels.

However, observe the price actions on confirmed continuance above or below moving average curve.

Prices above this lagging indicator help us understand the ability to catch a move above or below and remain in a move and develops a sustained move.

Both precious metals are almost moving in sync with 10DMA and have remained well below this curve, which signals previous bearish trend likely to resume at any time but certainly cannot initiate bullish positions for long term.

Thus, both metals may rally up to above resistance levels amid speculation over the U.S. central bank's raising rates within 2015 or until sometime next year.

As a result, Gold futures have been rallying to 7 week highs today amid growing expectations that the Federal Reserve will hold off on hiking interest rates until 2016.