Wednesday 30 January 2013

Metals higher..but fail to clear resistance

Gold and Silver both closed moderately higher, but we saw a very clear reaction at resistance of the declining upper channel/trend. With Gold putting in a black warning/fail candle, it would appear we will see renewed downside into the weekend.


GLD, daily



SLV, daily


Summary

The FOMC announcement earlier certainly did help to give the metals a little kick higher, but it did not last more than an hour..and both metals closed off their highs.


Downside targets

GLD - the big 158 level will be VERY strong resistance, but if the main market does retrace to sp'1460/50..with VIX 17/18...perhaps we'll see GLD 156/54 later next week.

I do not expect a break <154..anytime soon.

SLV, - the 28.50 level will be key...and if we see this fail to hold, then a brief move into the 27s is viable. That sure would give the gold/silver bugs a good scare, and wash out just about all of the weaker (trading) hands.

There is extremely strong rising support for SLV around 27.50/25. I would guess we will not break into the 26s this spring.
--

With continued QE - via 40bn MBS and 45bn t-bond buying, there is an awful lot of new 'free money' out there, and it would still seem both equity AND commodity markets will be lifted higher into the spring and early summer.