Weekly Bullion Technical Outlook – Build in May & Go Away!!

Precious Metal – Plummeting Precious Metal Prices

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Build in May & Go Away. Sound silly isn’t it but we are making a strong argument that this could be relevant as the economy start to unravel its seasonal pattern. Of course we are not trying to be suggest that it will happen but using a valid reasoning to back this up then we increase the probability of being right.

The month of May has often been the bleakest month for Precious Metals (true since 2013). True that the US dollars has taken a beating (that is in the short term) but it is finding long term support with May being a month for strong dollar. Therefore, we expect a rebound which could result in lower XAU/USD prices in the next few weeks. History often teaches us an important lesson and we could see a repeat of such price action happening in May 2015 as in 2013 and 2014. The media will put the US dollar and Federal Reserve decision on the rate hike as their main priority as we approach the month of June. The betting barometer on the rate hike will certainly cause much volatility in forex, equities and commodity prices as market players look to position themselves.

Keep a close eye on the next set of economic data from the US as it will determine the short term price action. Fundamentally, a rate hike in June could have been priced in as the Federal Reserve continues in its “Transitory” mode to keep the market on tenterhook.

Gold Technical Outlook

Weekly Chart

What a week it has been as prices whipsawed, taking out both shorts and longs in the process. Honestly, it has not been the easiest market to trade as the average true range changes day by day depending on what economic data is being release. At the mercy of such events, prices fluctuated and the lack of conviction between bears and bulls has certainly caused no joy in swing trading. Without being able to trend, traders are taking a short term view and profit taking has been rife. We will be patient and remain steadfast on our trading plan (Build in May & Go Away!).

Trade: Short stopped out. However, we will build a medium long position at 1160 area.
Position Valid Date Price Action Stop Loss Target Results
SHORT 20th – 24th April 1177 STOPPED OUT 1188 1173.5 (1162) -11
SHORT 4th – 8th May 1190 Order Placed 1197 1160
LONG 4th – 8th May 1156 Order Placed 1142 1266
20 WMA 50 WMA 100 WMA
1210 (-3) 1236 (-2) 1268 (-2)

Weekly Gold

https://www.tradingview.com/x/ptTR3IyA/

Silver Technical Outlook

Weekly Chart

Silver correlate with Gold and often this is the case. The candlestick on Gold weekly does not give any confidence to go long and even though Silver is currently range trading in a symmetrical triangle, it only adds to our argument that more selling could occur in the next few weeks.

Trade: Looking to short Silver on the break out of the triangle formation. Valid for this week only.
Position Valid Date Price Action Stop Loss Target Results
SHORT 20th – 24th 15.95 STOPPED FLAT 15.95 (16.35) 15.60 (15.55)
SHORT 4th – 8th May 15.50 Order Placed 16.00 14.50
20 WMA 50 WMA 100 WMA
16.48 (-4) 16.96 (-7) 18.24 (-6)

Weekly Silver

https://www.tradingview.com/x/zUoOSXSN/
Platinum Technical Outlook

Weekly Chart

Last week commentary on Platinum is more or less in the money and we continue with this view. After price action has played out, we are convinced of lower Platinum prices. “With that, we will not rule out that any attempt to 1150 area is merely a corrective rally which we look to sell at strength. Should weakness continue then the lower Bollinger Band at 1100 is the next ideal target with the previous low of 1086.2 as the next target.

Trade: Placing a Short position on Platinum. Valid for the next 2 weeks.
Position Valid Date Price Action Stop Loss Target Results
SHORT 4th – 8th May 1145 – 1156 Order Placed 1186 1085
20 WMA 50 WMA 100 WMA
1181 (-5) 1294 (-6) 1355 (-3)

Weekly Platinum

https://www.tradingview.com/x/G6iVZzEp/

Palladium Technical Outlook

Weekly Chart

We admit Palladium is a difficult market to trade in and recent price action has once again held between 726 – 820 range (see chart below). We are looking to build a long position around the 755 to 765 levels with stop at 739 and target 790 – 800 levels.

Trade: Valid for this week only.
Position Valid Date Price Action Stop Loss Target Results
LONG 04th – 8th May 755 – 765 Order Placed 739 790 – 800
20 WMA 50 WMA 100 WMA
781 (-2) 807 (-1) 772(+/-)

Weekly Palladium

https://www.tradingview.com/x/dRl2t9b0/

This article is written according to the author’s views and by no means indicates investment purpose. Opinions expressed at Sharps Pixley Ltd are those of the individual authors and do not necessarily represent the opinion of Sharps Pixley Ltd or its management, shareholders, affiliates and subsidiaries. Sharps Pixley Ltd has not verified the accuracy of any claim or statement made by any independent writer and is reserved as their own and Sharps Pixley Ltd is not accountable for their input. Any opinions, research, analysis, prices or other information contained on this website, by Sharps Pixley Ltd, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. Sharps Pixley Ltd will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The data contained on this website is not necessarily real-time or accurate. 

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