Technical Update - Precious metals plus Copper
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Gold and Silver reversing bearish correction resuming medium term uptrend. Gold longer term scenario outlined in Q2 Outlook intact. Platinum and Palladium seem to have found support but struggle to get upside momentum. Copper range bound.
Gold XAUUSD has resumed uptrend broken above $1,967. Support at 1,916 proved to be too strong. RSI moving back above 60 threshold with no Divergence supports the bullish outlook. Bollinger bands expanding indicating Gold is in early stage of the uptrend.
Minor resistance at $2,000.
The longer term scenario on Gold expressed in our Quarterly Outlook is still intact . Read it here: https://www.home.saxo/insights
Extract: Gold has formed what looks like a cup and handle pattern: B is the bottom of the cup and C is the handle.
The cup and handle pattern is confirmed if gold performs a daily close above peak A at $2,078. If this scenario plays out, we can then calculate possible targets. As a minimum gold should reach 1.618 projection of the handle height—in other words, a price target of around $2,328. Based on the full cup the price could potentially reach 1,618 projection of the distance between A and C—around $2,578. If demand deteriorates and gold breaks below $1,673 (the bottom of the handle), this cup and handle scenario is busted and a downtrend will unfold towards $1,500-1,350.
However, with the Relative Strength Index (RSI) showing no divergence and back above the 60 threshold, the bullish picture is supported.
Silver XAGUSD spot has resumed uptrend almost similar to Gold. Silver formed a Pennant like corrective pattern with strong support around $24.00. Now broken out bullish, RSI back above 60 with no divergence and Bollinger bands expanding. Resistance at the 0.618 Fibonacci retracement and 24th March peak around 25.85. It is not as strong resistance i.e. likely to be taken out. March peak around 27 is not unlikely to be tested.
XAUXAG Gold/Silver spot ratio keeps trading in months long symmetrical triangle pattern.
Platinum XPTUSD spot seems to have found support around the 0.764 retracement level around $950-960. A daily close below $945 is likely to result in December lows around 900 is to be tested.
55, 100 and 200 SMA’s are all declining providing overhead resistance. Platinum could be stuck in a range between 950 and 1,025 for some time. A close above short term falling trend line could indicate an attempt to break above 200 SMA.
Palladium seems to have found support around 100 and 200 SMA’s reversing March bear corrective move. A Daily close above $2,639 will confirm uptrend and a push towards peak around 3,425. A Daily close below 2,166 bear trend resumes.
Copper seems range bound between 460 and 482. A break out of this range is need ed for direction. RSI is still showing bullish sentiment indication break out is likely to be up.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.