Precious Metals Moderately Low

By Peter Aan.

All four markets are moderately lower this morning and succumbing to selling pressure as this commentary was being written. Here’s what I see:

Gold fell sharply Wednesday, breaking through the 1108.50 (December contract) that I discussed. Since then it has been catching its breath, with lower volatility. Today’s action so far is on the downside, and seems likely to take out Wednesday’s low of 1100.1. If we reach the sub-1100.00 level, especially on a closing basis, the road will be paved for a trip down to the July-August lows at the 1073.70 to 1079.20 area. Lower prices expected.

For the last 7 days or so, Silver has been about as trendless as a market can get. We are now in the lower part of that trading range. If it wants to go lower, a close below 14.425 to 14.440 (December) will be our first clue. Such a breakdown would clear the way for movement towards the August low of 13.950. The thing about a trendless market is that it doesn’t take much new buying or selling pressure to move it up or down.

We took out the 980.10 level that I discussed on Wednesday, and this morning we have taken out the 970.30 support level, also discussed. If we close below that level we could see movement down to the July-August double bottom formed around 945.40.

Palladium remains trendless, and has continued to avoid a close below 569.00 (December). If we get that penetration, we are set up to test the August low of 519.20.

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.