Market Insights – Monday, Feb 16, 2015

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

Gold closed higher on Friday, but well off its daily high. Buying pressure was renewed in the overnight session and early trading today, but we remain within last Wednesday’s range. The market is still oversold, and the short-term trend remains down. A close above Wednesday’s high of 1238.7 (basis the April contract) would be the first sign that the trend may change. If prices falter and recent lows are taken out, we should continue to keep the Jan 2 low of 1168.3 in our sights.

Silver was quite strong on Friday, taking out the February 6 high discussed last week, but the action last night and early today is lackluster. The most immediate support remains at 16.545 (basis March), and the first resistance level in our sights remains the February 3rd high of 17.75.

Platinum worked higher on Friday and is slightly higher this morning. An oversold condition is still indicated on the Bollinger Bands. A close above the February 11th high of 1214.10 (basis April) would be the first concrete sign that the market may want to start a meaningful uptrend. Otherwise, if selling comes in, we continue to keep an eye on the January 2 low of 1187.70.

Palladium’s action to the upside on Friday was impressive, but the momentum did not spill over into this week, and prices are moderately lower this morning. If the bulls step in again, look for a renewed attack on the February high of 799.0 that I mentioned last week. If the fizzle continues, though, the support levels discussed last week are still valid: 763.60 (basis March), 758.0, and more important support at the January low of 746.0.

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.