Macro: Sandcastle economics
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Technical Update - Copper breaking resistance levels. Gold and Silver struggle to move higher
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Copper surged more than 5% Thursday taking out the resistance at $435 and closed above the 0.618 Fibonacci retracement. RSI closed above 60 threshold i.e. back in positive territory and uptrend confirmed.
Expect a few days with minor setback/sideways trading before copper is likely to test falling upper trend line and 0.764 retracement at around 465.
For Copper to reverse the bullish outlook a close below 420 is needed. First sign of this not very likely scenario to play out is a close below the lower rising trend line
Other metals reacted to the surge in copper.
Gold Spot AUXUSD closed almost spot on the 0.382 retracement and is in a neutral position. Break out from 1,875 or 1,825 is needed for direction. If Gold drops back below 1,825 bear trend resumes.
With the declining Simple Moving Averages (SMA’s) there are headwind for Gold. RSI still showing negative sentiment.
Silver spot XAGUSD jumped too but seems to be rejected at last week’s peak around 22.45. Break below 21.45 bear trend resumes.
With the declining SMA’s there are headwind for Gold. RSI still showing negative sentiment.
Gold/Silver Ratio XAUXAG seems range bound between 82.90 and 86. Break from that range is needed for direction. RSI showing no divergence indicates break out to be to the upside with likely new highs.
However, further downward correction to around 81-81.60 before uptrend resumes is not unlikely.
Platinum Spot XPTUSD is in an uptrend testing resistance at around $1,025. A close above confirms that picture.
Platinum seems to be unfolding an inverted Shoulder-Head-Shoulder like pattern with a potential target 1,080-1,100
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