Daily Spot: Metals
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Gold Dec (GCZ) Another big intraday drop Tuesday tested the 1338.00-1342.00 objective, filling the gap back to 1337.60 and testing much of the structure that included it.
After testing it thoroughly intraday, the gap was still being tested through the close. Neither of two possible bottoming setups was triggered, meaning that the gap’s test did not produce a bottom. The gap’s 1327.10 prior low wasn’t probed, and the gap’s 1343.40 prior high wasn’t recovered.
Although not required, a bounce is possible. But a bounce would be unlikely to gain traction, perhaps peaking in the 1365.00-1372.00 area before resuming the decline.
Dollar Basket Dec (DXZ) Having broken out of a three-day consolidation Monday, sharply higher highs Tuesday confirmed the breakout. The highs also tested 79.50 resistance. The rally is entrenched, which allows a counter-trend dip to refuel buyers.
30-year Treasury Dec (USZ) A retest of 126’00 as support was too much for sellers to maintain. But a bounce up to 127’23 was not the product of the long bond’s attraction as a destination in a flight-to-safety. The bond’s rally mostly came after the stock market had paused in its deterioration. This is troubling as it suggests the sovereign debt issues are actually affecting the price of U.S. Treasuries. This bounce has room up to 128’03-128’14, and the steeper its slope the more bearish its resolution.
Crude Oil Nov (CLZ) Having paused Monday to absorb Friday’s shock to the system, the decline resumed Tuesday. Its low came within 30 cents of this leg’s 82.00 target, which is likely to be tested down to 81.30.
Natural Gas Nov (NGZ) A recovery of Friday’s drop back above 3.93 was needed at Monday’s close or at Tuesday’s open to resume the rally. Neither parameter was fulfilled. Tuesday’s intraday high did complete the retracement, but it was too late for its recovery to be predictive. The pattern would have been bearish had there been more optimism, like probing 3.93 before failing. Its recovery Wednesday would get a benefit of the doubt for at least targeting a retest of last week’s highs.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).