Monday's Precious metals commentary

The following comments were sent to Myra P. Saefong, Financial Columnist at Marketwatch.com, at 7:33 AM EDT.
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The traders that are looking at the daily charts of Gold, Silver and Coppermight conclude that the secular bull markets and well-defined trends thathave developed over the last 5 years have come completely unravelled.But a longer-term view of the markets, i.e. weekly and monthly charts,provides a far brighter picture. By expanding their time horizon traders canfind strong evidence that the long-term trends remain intact.Successful traders often need to alter their perpective especially during periodswhen the markets experience a lack of direction and become choppy andvolatile because these types of markets are extremely tough to squeeze profits from.A short-term trader could make the case that there are only 2 positives in theGold market right now. 1) OCT GOLD closed above the 50-dayMA (627.30) on Friday and 2) the 100-day MA still has a positive slope.The bad news is more extensive. The 20 and 50 day MA's have turned downand Gold closed below both the 20-day and 100-day MA's on Friday and isnow trading more than $50 below the retracement high of 684.70 on July 17th.In other words, it's not looking good if your focus is on the short-term.Absent of well-defined short-term trends the markets are being whipsawed byevery minor news item and comment by anyone of any importance around the globe.This makes for an extremely difficult trading environment. The short-termtraders can only hope that the current market conditions will be short-lived and that theshort-term trends will emerge once again. If this occurs, the likelihood that the metalsmarkets can push to new all-time highs will rise dramatically.

Dale F. Doelling
Chief Market Technician
Trends In Commodities