Gold and Silver futures defend nearby support

Both Gold and Silver futures have pulled back but are defending nearby supports within tactical uptrends as defined by rising 26- and 40-day moving averages.

Gold futures defend a 38.2% retracement and rising 40-day moving average

The pullback from the October 20 high of 4398 on gold futures has defended support at the 38.2% retracement of the May-October rally at 3911 and the rising 40-day moving average (DMA) also at 3911. It is early in today's session, but closing above yesterday's open at 3999.90 (call it 4000) would form a daily bullish engulfing candlestick that could solidify a tactical low for gold. A close today above the rising 26-DMA near 4024-4025 would increase conviction in a tactical low.

Chart 1: Gold futures: Daily candlestick chart with moving averages

Silver futures defend rising 40-DMA on a bullish hammer candle

The pullback from the October 17 high of 53.77 on silver futures has defended support at the rising 40-DMA ate 46.20, forming a daily bullish hammer candlestick pattern yesterday (10/28). While early in today's session, silver has rallied, which could confirm this hammer. A close today above the rising 26-DMA near 48.20 would increase conviction in a tactical bullish reversal for silver.

Chart 2: Silver futures: Daily candlestick chart with moving averages