Precious Metals Continue Seeking the Upside

By Peter Aan.

As the equities markets fall victim to the China Syndrome, the precious metals markets continue to follow through to the upside.

Gold is solidly higher this morning, reaching the highest levels since July 20. A few more days of this type of action could bring us to an overbought indication on the Bollinger Bands, a condition we haven’t seen since mid-June. Again, this market has no chart resistance until you get to much higher levels, so higher prices seem likely.

New highs for this move were also made in Silver. I continue to look for movement towards the July 13 high of 15.900 (September) over the coming weeks. This market is overbought on the Bollinger Bands for the first time since mid-May, but this is the only bearish cloud on the horizon that I see.

Platinum took out the 995.70 and 999.70 levels (October) I discussed earlier, further confirming its bullishness. We are approaching an overbought situation, but higher prices are still expected. Chart resistance is at much higher levels.

Palladium worked higher, as expected, but still seems timid relative to the other metals. I continue to watch the resistance level at the August 3 high of 626.55 (September). Once past that, look for a test of the July 23 high of 641.50.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for our 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.