The precious metals may finally be suffering from the rarified air that they find themselves in at this time. Frankly, it's time for the markets to give back some of the recent gains and, hopefully, that's what we'll see this week. After reaching new contract highs overnight the markets are finding little follow through in the pits and have now turned negative on the day. There's certainly no cause for alarm. The markets are overbought and a pullback from these levels is absolutely necessary in order for the trends to continue their upward paths. I won't be surprised to see FEB Gold slip back to around the $545 area before it launches its next leg up. MAR Silver will most likely test $9.00 and MAR Copper has strong support at $2.00. All in all, the markets have gotten off to a fast start in 2006 and those traders who aren't committed to the long-term trends will ultimately fuel the additional gains as they cover their long positions only to buy again later after they have concluded that their exit was premature.
Dale F. Doelling
Editor and Chief Market Technician
Trends In Commodities
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