Market Insights – Gold Trending Higher This Morning

Sitting in while Roy Friedman is out, is Peter Aan, a Dillon Gage Metals Trader. Here are his Market insights:

Gold is higher this morning after making new lows for this move on Monday and Tuesday. If the buying pressure persists, look for a test of the 1222.9 high (basis the April contract) from last week as our first resistance. If we penetrate that, look for further movement to test the February 17th high of 1236.7. The overall trend is still down, however, and if this short-term rally fizzles, fresh lows should turn our attention once again to the January low of 1168.3.

Silver is also higher this morning, and seems poised to test the February 19th high of 16.810 (basis the May contract). If that is pierced, we could move further to test the more important high of 17.475 from February 13. Like the gold, the overall trend remains bearish, and a failure of this rally could see Tuesday’s low penetrated, leading to a test of the December and January 2 lows.

Platinum is higher this morning, but remains quite a distance from meaningful resistance at the February 17th high of 1217.9 (basis April), and further still from more meaningful resistance at 1253.7. A failure of this rally seems a bit more probable.

Palladium is the strongest of the precious metals markets, and has taken out the highs of the last several weeks, hopefully a sign that it will now find some sense of direction. It has even reached the upper Bollinger Band (an overbought indication), while the other metals are nowhere near their upper bands. Now following the June contract, we could see a test of the January 13 high of 819.80 and the December high of 822.35. Despite this strength, though, when we step back a bit from the chart for a longer-term view, we still have a congested, sideways pattern.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for their metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.