Precious Metals: Contratrend Rally And Not

Gold – Where’s the Contratrend Rally?

Gold Spot price (GOLDS-1,178.59) carries an enigma in behavior over the past six months in that with the dollar rally, Gold went nowhere; with the stock market rally, Gold went nowhere. Both of these relationships are generally inverse in nature.

However, from a Relative Strength perspective, the expected underperformance of Gold versus the dollar and versus stocks, has held 6 Gold has underperformed both.

Now with the dollar pulling back and the stock market mixed, Gold is still flat (see Figure 26). The potential for a Gold rally may still lie ahead, but at the moment there is no compelling technical indication, as both the monthly and weekly momentum models remain flat and indecisive.

Therefore, the stalemate between the support from 1,147-1,131 and resistance at 1,273-1,300 remains. Whichever parameter is breached should determine the next short-term direction for Gold.


Silver – Ditto

Silver Spot price (SILV-16.16) remains neutral between 15 support and 18 resistance; the next move to be defined by a breach or penetration of one of these levels.

Copper – Rally into Resistance

The Copper Continuous Futures Contract (HG1- 293.15, see Figure 27) rallied into the declining 200-day MA and just below the major five-year resistance at 300 (formerly support). There could be further rally toward 300, or even toward the 2012 downtrend at 325 with weekly momentum positive. But any pullback that slips below 265 would suggest the rally is ending and a return toward the recent low at 250 might be forthcoming.


Platinum: Flat Near Low; No Contratrend Here

Platinum spot price (PLAT-1,132.00, see Figure 28) has not been able to improve after breaking the recent support at 1,170 and is holding above the low of 1,100, now support. Weekly momentum is flat, monthly remains negative and declining. Were a rally to ensue, 1,250, near the 200-day MA, might contain price; 1,300 major resistance above. A breach of 1,100 could carry toward 1,000.


Palladium – Neutral

Palladium spot price (PALL-774.25, see Figure 29)) failed to hold above the uptrend and slipped back toward 745 support, but below the MAs and with negative weekly (and monthly momentum). Price needs to surpass 835 or slip below 745 to determine the next short-term direction. The neutral range may continue.



The above article is an excerpt from Yamada’s latest monthly update for premium subscribers, released today. We recommend subscribing to the monthly in-depth analysis of Louise Yamada on for quality technical analysis of all markets.


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