Technical Update - Precious metals, Copper and Iron Ore
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Metals struggling to get real traction on the rebounds. Selling pressure seems likely to resume shortly
Gold XAUUSD spot has broken out of steep falling Trend channel. After finding buyers just above 1,780 support. Now back above 200 SMA testing 0.382 Fibonacci retracement at 1,867.
Further upside is not unlikely but will be a struggle with resistance around the 100 SMA and especially the 0.618 retracement at around 1,917. That’s also where you have 55 SMA coming down putting a lid on the upside on the short to medium term.
If Gold drops back below 200 SMA currently around 1,838 selling pressure could intensify likely pushing Gold to test 1,780 support.
Silver XAGUSD spot hovering around 0.236 Fibonacci retracement around 21.85. Rebound doesn’t seem to get traction. 22.20 needs to be taken out for further upside. If that scenario plays out we could see XAGUSD moving to around 23.20 resistance.
A break below 21.25 new lows below 20 are likely possible down to around 18.90-18.40 area. See weekly chart
Platinum XPTUSD spot seems to be range bound between 900 and 1,025. However, the underlying sentiment is bearish with RSI showing negative sentiment and XPTUSD trading below 55, 100 and 200 SMA with all of the declining meaning April lows at around 908 could be tested shortly.
Palladium trading in a declining channel. Down trend pressure to pick up if Palladium trades below 1,913. RSI is showing negative sentiment with no divergence indication April lows are to be tested.
Copper rebound off support just above 400 seems to have found resistance at the 0.382 retracement at around 435. If trading above 435.50 resistance at 444 is likely to be tested possible also the strong resistance at 450. However, Copper upside looks challenged and if Copper drops below 413 the 400 support is likely to be broken. A very likely scenario to play out. If it does it could result in a massive sell off down to around 370.
A close below the short term rising trend line on RSI is first warning of this bearish scenario to play out
Iron Ore pulled back from 128 to just below 140 as outlined as a likely scenario a couple weeks ago. Selling seems to resume and 128 is likely to be taken out. If that occurs sell off down to around 120-118 is likely possibly even down to around 108. For this negative scenario to change a daily close above 138 is needed. However, there is strong resistance at around 143.
Latest Market Insights
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?
Energy crisis could turn energy stocks into secular winnerWith long-term expected returns for the global energy sector close to 10%, we look at 40 stocks that could be set to cash in.
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.