By Peter Aan.
Sunday night’s openings in the metals were all close to Friday’s close, but none were able to build from there and all have slid to substantial losses. Here’s what I see now:
This morning we have seen Gold take out Thursday’s low. As I said on Friday, this is an important short-term level. Now that this has been penetrated (and a close below this level would be a stronger indication), we must now expect a test of another short-term support at 1120.50 (December contract). We are close to that level already, but a more important support level is at the September low of 1097.70.
Silver is weaker than Gold this morning, crashing through the recent low. Now we turn our attention to the September low of 14.240 (December). After that we have the more important low made in late August at 13.950. You have to go back to 2009 to find prices lower than that.
Platinum remains the weakest of these four, and has plunged into new lows this morning, reaching the lowest level since January 2009. As I’ve written before, the mega-low in Platinum is the 761.80 from 2008. That was the culmination of a plunge from the lofty height of 2308.80 reached earlier that year. You have to go all the way back to 2004 to find a lower Platinum price. We are far above 761.80 now, but there’s no reason to expect anything but lower prices for now.
Palladium, our strongest market of late, is also pulling back this morning. We have traded below Friday’s low, and a close below that level would certainly indicate the start of a correction. With the recent strength of this market, I would not be quick to call an end to this bull market.
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.