Make or Break – Precious Metals 04th June

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED

A late sell-off in gold price hours after Europe close but it managed to find support at 1179 followed by short lived rebound. On the shorter time frame, the price action indicates a megaphone structure with a higher high and lower low. The bulls and bears are trying to gain control on next big direction on gold. There is no doubt that majority are calling for much lower prices. We want to highlight that particular mind set and again reiterate a contrarian view until invalidated by price action.

Expect prices to continue its swing high and low – with a close eye on any change in sentiment. This market is suitable for day traders rather than swing traders – unless of course he/she managed to sell at the top or buy at the bottom. Rising US yields are not helping gold as it call for a rise in interest rate which should support a stronger US dollar. A break below 1179 then looks for support at 1170 and 1163. Meanwhile, only a break above 1206 will relieve the selling pressure and possibly take on 1211 levels. It seems that tomorrow NFP data will be the driver for a few hours of whipsaw and taking out stops – both longs and shorts.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous high at 1232.31
  • DMAs 200 at 1211 / 100 at 1209 / 50 at 1197 and 20 at 1199
  • Previous high at 1204

Daily Support Levels:

  • Previous low at 1179.6
  • May low 1170.30

The lower Bollinger Band stands at 16.12 and that should provide a minor support which may warrant a bounce to 16.45 levels. Should that play out; we envisage lower silver prices with a potential price target of 15.77 as stated yesterday. The RSI also seems to suggest that there are more rooms lower from here on and the white metal is not oversold yet.  We have covered all longs and entered a small short with stop at 16.90 levels.  Given recent market volatility, we will aim to raise stop as soon as possible.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • Previous daily high at 17.75
  • 200 ma at 16.86, 100 ma at 16.67, 20 ma at 16.86, 50 ma at 16.60
  • Upper BB line at 17.64

Daily Support Levels:

  • Previous low at 16.39
  • Fib retracement level 38.2% at 16.40
  • Lower BB at 16.12 (watch BB rising and Converging)

Is platinum trying to base above 1100 as we enter pre-NFP results? The other question we have in mind is will we see a big dump and pump on the metal post-NFP? Weakness in Platinum is by far the worse out of all the metals and the damage done on the chart is suggesting more weakness to come forth unless we see a strong green close. Only a break above the downtrend line will give buyers some relieve, otherwise we have 1067 as price target.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 1177.1
  • 100 dma at 1168 / 50 at 1144 and 20 at 1136

Daily Support levels:

  • Previous low at 1100.1
  • Lower BB line at 1089
  • March low at 1086.5

Palladium hit a low of 751.50 which has strong support zone as it confluence with 61.8% from the previous rally. We continue to see some sort of relieve pullback as it reach some minor support but maintain the view that this is a sellers’ market. It maintains the course of lower high and lower low is now registered coming to that block of support zone highlighted in blue. Only a break above 801 will give the bulls the confidence to test higher prices. Current price action is dominated by sellers so a pullback higher is a sell. Look to add short at 775 to 783 key levels to target a retest of 752 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 801.6 and 797.6
  • 200 dma at 790 / 100 at 777 / 20 at 778 / 50 at 771
  • Downtrend line (see the shaded brown zone)

Daily Support levels:

  • Fib retracement levels 38.2% at 771.5 / 50% at 762.3 / 61.8% at 752.9 (tested)

Economic Calendar & Fundamental Analysis

Thursday, June 4, 2015
All Day Holiday Brazil – Corpus Christi Day
00:00   JPY BoJ Governor Kuroda Speaks  
01:30   AUD Retail Sales (MoM) (Apr)

–          Not great data going forward

–          Need to cut rates again

0.0% 0.4% 0.2%
01:30   AUD Trade Balance (Apr)

–          Aussie dollar weakness needed to repay

-3.888B -2.250B -1.231B
07:00   GBP Halifax House Price Index (MoM) (May) -0.1% 0.3% 1.6%
07:00   GBP Halifax House Price Index (YoY) (May) 8.6% 8.5% 8.5%
19 min   GBP BoE QE Total (Jun)

–          should remain the same

  375B 375B
19 min   GBP Interest Rate Decision (Jun)

–          unchanged which should support GBP

  0.50% 0.50%
12:30   USD Initial Jobless Claims

–          If lower than expected then expect lower USD

  279K 282K
12:30   USD Nonfarm Productivity (QoQ) (Q1)

–          US stocks not reacting higher on bad data now

  -2.9% -1.9%
12:30   USD Unit Labor Costs (QoQ) (Q1)   5.9% 5.0%
14:00   CAD Ivey PMI (May)   55.5 58.2
16:00   USD FOMC Member Tarullo Speaks

–          Dovish or Hawkish remark will push dollar

 
19:00   MXN Interest Rate Decision (Jun)   3.00% 3.00%
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