Market Insights – Platinum Remains The Strongest

Sitting in while Roy Friedman is out, is Peter Aan, a Dillon Gage Metals Trader. Roy will return on Monday. Here are Peter’s Market insights:

Gold worked higher Thursday, giving a respectable test of the 1222.9 level I mentioned, but ended with an unconvincing mid-range close, and is little changed in early morning trading today. If we have a successful penetration of 1222.9, 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 behaved similar to Gold on Thursday, but the penetration of a minor resistance level did not attract new buying, and it, too, fell back. It is showing a little more weakness this morning than Gold. If the bulls try again, we have a new minor resistance level to watch at Thursday’s high of 16.905 (basis the May contract). Otherwise, we could weaken to test Tuesday’s low of 16.085, leading to a test of the December and January 2 lows.

Platinum also rallied and fell back, but is showing some buoyancy this morning. We remain 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. Medium- and long-term trends still point south.

Palladium remains the strongest of these metals over recent days, and Thursday gave us a test of the January 13 high of 819.8 (basis June). On the bullish side, it has some short-term momentum underway. On the cautionary side, it still has significant resistance a little above current levels and an overbought condition of the Bollinger Bands. If this short-term rally fades, this congested market could continue to be a sideways affair for a while longer.

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.