Metals reacted in the last week and a few are near their 20 DMA. A close below this moving average would suggest that the intermediate trend is down and lower levels towards the next supports indicated here are likely. Gold remains subdued as the volatility has been falling. The breakout in lead failed suggesting weakness in metals.
Gold remains in a sideways intermediate trend and as suggested in the last week, volatility in gold is falling after the strong volatile and trending conditions in November and December. Metals like stocks go through periods of expansion and contraction. After the strong expansion in November, we are seeing contraction in past few weeks. In the period of contraction, gold will remain choppy within a range and only scalper will benefit. Position traders and swing traders must stay away.
In the short term gold has a support at 16,573 and a resistance at 17,015. Only a strong move out of this range will result in a trending mode. On the weekly charts, gold has a support at 16,454 and only a close below this level will spell more weakness as it head towards the supports of 15,985 or 15,120.
Silver is in an intermediate uptrend and is closer to the weekly resistance of 28,770. The weekly MACD indicator is below the trigger line and is in the sell mode indicating that the possibility of silver closing above the weekly resistance is low. Traders must look for profits in their long positions. On the lower side, silver has a support at 27,865 and a close below this support will result in the intermediate trend turning down.
On the weekly charts, silver has a support at 26,602, which is also the earlier intermediate bottom. A close below this level will result in the major trend of silver turning down. Also, this will result in a very bearish breakdown below the Head and Shoulder neckline. Thus, the support of 26,602 must hold in the next intermediate correction, or more weakness could be in offing.
Zinc has dropped into an intermediate downtrend in the last week and is currently taking a support at the short term support level of 110.60. A close below this level will result in zinc heading lower towards the next support of 102.50 which is the weekly support level. This is an important support level and must hold, otherwise it will threaten the major trend.
On the upper side, zinc has a resistance at 116.25 and as long as zinc stays below this resistance weakness will continue and traders must look for short positions with this level as a stop.
Copper dropped into an intermediate downtrend, but the metal has been holding above the important support of 340. A close below this support will result in more weakness as copper will head towards the next support of 324. This will give traders an opportunity to trade on the short side.
On the weekly chart. The MACD indicator for copper is exhibiting a negative divergence suggesting loss of momentum at higher level. Once copper heads lower towards the support of 324, it could test the weekly support of 314. As long copper stays above this weekly support of 314, all corrections are technical corrections within the major uptrend.
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