Precious metals ready for liftoff! Dollar decline has commenced.

The brief period of selling is behind us and the Precious metals, with a little help from the Dollar, are ready for blastoff! There’s really not a whole lot to say when markets are trending like the vast majority of the commodities markets are these days. All a trader can do is hop on board and hold on for the ride. I have no idea what level Copper, Gold and Silver will eventually reach but I do know that the trend for all three is most definitely up. Copper and Gold have done well and I really think Silver will eventually catch up so, of these three markets, Silver still looks to be the most compelling trade. I have read numerous comments stating all kinds of fundamental reasons why we’re seeing the moves that we’re seeing and, if that’s what someone thinks is important, who am I to argue? But if you’re looking to actually make money in these markets all that really matters is the price.

Sell ALL brief rallies in the Dollar as the next move down has commenced.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The U.S. Dollar - R.I.P.

The Dollar/Yen is now comfortably above the 113.00 Yen level and is looking to test the mid-July high of 113.71. With the Dollar in nose-bleed levels from an overbought perspective, I’ll be very surprised to see a close above that previous high. The Dollar may breach that high and take out all the stops that lie above but I will be a heavy seller of Dollar/Yen should that occur. The Precious metals are holding up fairly well in light of the Dollar’s overnight strength. This just bolsters my opinion that a low was made in DEC GOLD at my target price of $462-$463 and, should my outlook for the Dollar actually come to fruition, we’ll look back in a few weeks and see that the decline in the Dollar was the catalyst for what should be new highs in Gold and Silver prices.

Nothing has changed in the Copper market except the price. It’s hard to believe that in just a little over 2 years Copper has gone from 75 cents to roughly $1.75. So, it’s onward and upward for this market as it continues to defy gravity. My outlook for Copper remains unchanged as $2.00 is still my upside target.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Where are the bears?

It looks like the stock market has no place to go but down now that Richard Russell has finally thrown in the towel and gone "neutral" on the market. There are no more bears left! I began shorting the Russell 2000 futures yesterday and I put all of my retirement funds into bonds. How low do I expect the market to go? Let's just say that the market will get ugly enough to cause some serious handwringing. The poor finish to 2005 will set the market up for a real debacle in 2006. I don't like to make predictions because nobody really knows what the markets are going to do but I will say this. I expect to see the DOW below the levels that it reached in 10/02 or around the 7,150 level. That's my initial target. Can Gold reach $1,000? That idea has some serious merit if the financial markets experience the kind of catastrophic event that I have laid out here. What's the probability that this will happen? I'm not a mathematician but I don't believe it to be that far-fetched. Only time will tell.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Tuesday's metals comments

The Dollar broke out vs. the Yen overnight but trading in the EURO has been more rangebound which may be one of the reasons Gold is relatively stable although lower. This is a tough call here with the metals. Will traders ambush the Gold market, pushing prices down by 8 or 10 bucks in one session or will this retracement be more orderly this time? Only time will tell. But we have to watch the Dollar because, if it this rally continues and gains momentum, the Precious metals will eventually feel the effect. With a slew of economic data scheduled for release this week, traders are bracing for the increased volatility that the markets will most likely experience. If DEC GOLD can somehow hold above last week’s low of 447.00, then the market may be able to sustain the rally that began on 8/31.

The Silver market has strong support at the $7.00 mark and traders will be anxious to see if the DEC contract can hold that level. Any close above $7.17 would likely lead to additional gains with an outside chance of testing resistance at $7.40.

Copper continues to consolidate and this is very healthy for the market. As long as the market remains above $1.58, the trend will remain up and Copper will continue to make new contract highs over time.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Monday's metals comments

This was transmitted to Marketwatch.com on 9/12/05 at 6:30 AM EDT.

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The Dollar/Yen rally which took place last week came to an abrupt end on Friday as traders began to realize that the FED may just stop raising rates if only temporarily. Last week was a perfect example of Gold and Silver rallying in the face of a stronger Dollar. Now, the markets find themselves at a crossroads once again. No one is more longer-term bullish on the metals than I am but the fact remains that the markets have reached extreme overbought levels. Markets have been known to continue for some time even though they are overbought on a technical basis and that could be the case here. But I’m afraid the metals bulls are going to be disappointed once again. If the Dollar does find its footing and breaks out above 110.75 yen, the metals may have no choice but to head south on the charts. The overnight action seems to support that observation as the Dollar began trading much weaker but, after breaking 109.00 yen briefly, turned and rallied. The early Dollar weakness had Gold and Silver moving higher but that early strength has now reversed although the losses are nominal. The best case scenario would be that the markets consolidate in a fairly narrow range for a week or two and work off some of the froth. The worst case would probably put the market back below $425 which would surely push the bulls to the brink.


Dale F. Doellng
Chief Market Technician
Trends In Commodities

Thursday's Precious metals comments

The following comments were emailed to Myra Picache, Financial columnist at Marketwatch.com on Thu 9/1/2005 7:18 AM:

Many times, when I’m asked to predict the future course of a market (and humbly decline!) I like to look at where the market’s been in order to get an idea where a market may be going. To get a better perspective on Gold, I’ve included a monthly chart for your review. The long-term chart clearly shows that Gold continues in a major uptrend and that the current market action is nothing more than a consolidation period which most likely will lead to the next major upleg in Gold. These weak rallies that we are seeing in the Dollar followed by sharp reversals are a pretty good sign that the greenback, for the longer-term, is in trouble. I continue to believe that Gold should be bought when it reaches the lower end of the trading range and I believe that this recent decline may end up being the last dip before the next big move.

Dale F. Doelling
Chief Market Technician
Trends In Commodities