Gold and silver showed some strength on Friday as the dollar weakened as fresh bailout plans for Greece eased worries about the collapse of the eurozone, but the metals remained near crucial support zones, breaking of which would lead to new multi-year lows.
The yellow metal rose to $1164.18, up 0.34% during the day, and moving further off the near four-month low of $1147 touched on 8 July. Silver rallied to $15.54, up 0.26% from its previous close, and distancing farther from the 7 July low of $14.68, which it touched seven months back.
On Friday, stocks rallied and the euro and pound strengthened as Greece submitted a new plan before its creditors agreeing for more austerity measures reducing Grexit-related worries.
EUR/USD rose to 1.1134, up 0.5%, distancing further from the 7 July one-month low of 1.0916. GBP/USD also jumped 0.5% to as high as 1.5450, moving further off the one-month low of 1.5330 touched on 8 July.
The dollar index weakened 0.4% on the day to 96.11, adding to the losses since Tuesday when it hit a one-month high of 97.44.
The FTSE 100 index was up more than 1% and DAX was up nearly 2% at around 9.15 am BST. Nasdaq Futures and S&P 500 Futures were also up more than 1%.
The white metal had been falling since 2011 April when it hit a record high of $49.82. It hit a five-year low of $14.14 in December last year after which it moved more or less sideways.
The downtrend, if maintained, then silver could touch $10-mark in the coming months. However, a big uptrend that dates back to more than 10 years is still on, which has a channel support around $14-$15. And that would probably weaken the likelihood of the $10 low.
Immediate resistance levels for silver are $17.88 and $18.22 and support levels are $14.68 and $14.14. The levels to watch ahead of $10 are $12.46 and $11.08.
Similar to silver, the yellow metal too has been on a downtrend since mid-2011 and has stabilised after hitting a multi-year low of $1131 late last year.
The consolidation is also endorsed by the big picture uptrend that dates back to 2005 even though the drop this month has mildly broken the channel support.
The downtrend if maintained $1000 is still possible but several hurdles remain ahead of that. Immediately, $1142 and $1131 are the two levels to break in order for hitting a new multi-year low below the last year lows.
Then $1044 and $1032 will enter the scene before hitting the big psychological level of $1000.