From Peter Aan, Senior Dillon Gage Trader
Gold
Gold is weak today, being drawn towards the panic low of 1080.0 from Sunday night’s opening. It’s oversold, but oversold markets often get even more oversold, so it is likely that we will see a further test of 1080.0, and a probable penetration. One number to keep in mind: 1086.65. That represents a 50% retracement from the 1999 low to the 2013 high. There’s nothing magical about the number, but markets often have turning points at this retracement level.
Silver
Silver is also down today, but showing less pressure than the gold. A test and penetration of the 14.49 low from Monday (September contract) seems likely here. There actually is a support level at 1410.0 from last December, although the market closed higher that day, which may reduce the importance of that number. Looking long-term, major support is at much lower levels. Currently only a close above 14.98 will give the charts a glimmer of bullishness.
Platinum
Platinum is also down today, and seems likely to make a better test of this week’s low of 946.3, basis the October contract. Currently, only a close above 997.20 will signal a possible end to this bear market.
Palladium
Palladium is the only precious metal that seems to be trying to work higher. Yes, we are sharply lower today, but we have not yet penetrated yesterday’s low, and that higher close yesterday was notable. If today’s action penetrates yesterday’s low of 599.35 (September contract), new lows for this move seem to be in the cards. If yesterday’s high (630.40) is taken out, we just might be able to start something meaningful to the upside.
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