Technical Analysis Of the Metals Market

Gold has closed lower today due to break of support levels, and remains below the 10-day moving average crossing near 1110.00. Stochastics and the RSI are oversold and are both still suggesting for more losses.Closes above the 20-day moving average crossing at 1137.40 are needed to confirm that a short-term low has been posted. If a further decline ensues from here the 38% retracement level of this year's rally crossing at 1032.60 is the next downside target. First resistance is the 10-day moving average crossing at 1109.00. Second resistance is the 20-day moving average crossing at 1137.40. First support is last Tuesday's low crossing at 1075.20. Second support is the 38% retracement level of this year's rally crossing at 1032.60.

Silver closed lower due to long covering and breaks of short term support levels; also, silver extended this month's trading range. The mid-range close sets the stage for a steady opening Wednesday. Stochastics and the RSI are both moderately oversold, diverging, and are turning bullish hinting that a short-term low might be in, or is near. Closes above the 20-day moving average crossing at 17.779 are needed to confirm that a short-term low has been posted. The reaction low crossing at 16.155 is the next downside target. First resistance is the 20-day moving average crossing at 17.779. Second resistance is this month's high crossing at 19.500. First support is last Tuesday's low crossing at 16.780. Second support is the reaction low crossing at 16.155.

Copper has managed to close higher today as it continues its short term rally.  Also, Copper has posted a new high for the year. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are still bullish signaling that sideways to higher prices are possible near-term. The 87% retracement level of the 2008-decline crossing at 3.48 is the next upside target. Closes below the 20-day moving average crossing at 3.18 are needed to confirm that a short-term top has been posted. First resistance is yesterday's high crossing at 3.344. Second resistance is the 87% retracement level of the 2008-decline crossing at 3.48. First support is the 20-day moving average crossing at 3.18; second support is the reaction low crossing at 3.08.

We are currently bearish on both Gold and Silver in the medium to short-term, suggesting that you still have time to purchase these two hard commodities at lower prices in the near future. However, we are neutral at the moment on Copper, and waiting for it to close above 3.34 which at that point we will turn bullish, or close below 3.18 would turn us bearish on copper for the short term.