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
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