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.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.