Spot gold retreated on Tuesday after yesterday’s gains were capped by solid resistance at 1267.30/68/98 (20-day MA, 26-Jun high, 23.6% retrace). A rebound in the dollar is weighing on the yellow metal.
A little more than half of the rally from last week’s low at 1237.93 was retraced in earlier trading, but gold has since recovered some of those losses. While the dominant trend is still bearish, we could see another challenge of the aforementioned resistance. A close above the 9-day MA (1253.27 today) would lend confidence to this scenario.
On the other hand, a close below the 9-day MA would suggest a more vulnerable tone. A breach of the overseas low at 1247.37 would clear the way for a retest of key support at 1237.83/1236.45 (03-Jul, 12-Dec-17 lows).
The dollar index rebounded to its 9-day MA, which has capped intraday gains thus far. The dominant feature on the DX chart is still the double top. While the failure to sustain the probe below the 50-day MA with a higher close was disappointing for the bearish scenario
Silver traded back below 16.00 in earlier trading, but has since regained this level. Nonetheless, momentum on upticks has been generally lackluster. A case can be made for an ascending wedge on the daily chart, with today’s earlier losses constituting a downside breakout.
Just looking at the silver chart, I’m inclined to be a seller. However, the gold chart appears a little more constructive. If the yellow metal makes another run at the upside, silver should follow.
Platinum is back on the defensive after yesterday’s gains stalled just shy of the 20-day MA. A breach of support at 834.50/834.00 would allow for a challenge of the halfway-back point of the recent corrective rally at 827.89. Penetration of this level would favor further probes below 800.00.
Palladium has fallen back into the recent consolidation zone having failed to sustain the test above the 20-day MA. This leaves palladium in a neutral state in the lower half of the well defined range.
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