Precious Metal Weekly – Gold & Greece Need a Saviour

Highlight of the week fall to Greece referendum and Chinese stock market falling off a cliff. Bloomberg reports that investors could use real estate as collateral – a desperate move to stop the stock market from falling. Even the PBOC has setup a team to investigate for stock market manipulator into short selling. Alas, most of investors are first time traders and have no prior experience thus when push comes to shove – it’s like a stampede as everyone is exiting to the door. Who is to blame in the first place? Of course the Chinese government and PBOC themselves for not having the economic and political sight to curb the issues but basked under the highlight of all time high = to economic growth (utter bullshit).

Simply said, hot money has left China as it initially seek better yield due to US rate hike tantrum and EZ uncertainty. Smart money move around and does not stay very long – this seems to be the case here. A Yes vote will offer stability and a change of government in Greece while a No vote will means painful negotiation that somehow will reach a conclusion as soon as possible. Post NFP data does not bode a confident US economy and the rate hike as early as September could be put into question should we have another set of lacklustre data. Take note that we have had sets of bad data in Q1 due to weather and Q2 data is picking up while Q3 is expected to be better.

We are watching the dollar rally that may hit resistance soon and the global equities that will enjoy full swing on volatility. Safe trading.

We call this the chicken beak and price action suggests we will have a breakout from the beak as a matter of when not if. Given our poor skills with Harmonic pattern, we just want to highlight there is a potential bearish gartley in the making if 12042 act as a strong resistance. Expect swath of volatility since traders will have fresh funding and new set of direction due to the outcome from Greece to move the market into the summer doldrums. As per last week commentary, we covered that the dollar could rally and test the 20 WMA and it has actually broke above. “With a short week ahead in the US market, the dollar positioning is set to create volatile price action. Next week we have a host of employment data and technically, dollar could rally further to test 20 WMA. A solid break and close above could meet resistance at 97.00 levels but we are not ruling out a higher dollar given the uncertainty in the Eurozone. “

Should Greece clinch a deal, the dollar rally will be heavily questioned and we stand by our argument for a weaker dollar.

Gold Technical Outlook

We have the gapped on the Monday open but buyers fail to push prices higher. Resistance at 1188 followed by further selling that take gold to 1156 as traders flock to safe haven dollar and yen trade. We will maintain our view on a swing long due to seasonal factor, as well as the on-going unresolved (yet priced in) Greek affair and a poor follow up on US economic data that has yet to transpire into dollar selling.

Trade: Pullback is a swing long opportunity.
Position Valid Date Price Action Stop Loss Target Results
LONG 15th – 19th June 1193 Closed 1185 1203 +10
SHORT 15th – 19th June 1173 Closed 1181 1164 -8
LONG 21st – 26th June 1175 Live 1150 1232
LONG 21st – 26th June 1185 Live 1150 1260

Silver Technical Outlook

Weekly Chart

With the commodities sector so heavily shorted, one has to question if a Greece deal could unravel a higher prices. Silver continue to sell off and it has reach a critical juncture of make or break. Break below 15.40 and 15.20 then we will get a flush to find support at 14.60. If we get a green bar next week, there is a hope for a corrective rebound to the 17.00 levels.

Trade:
Position Valid Date Price Action Stop Loss Target Results
LONG 25th – 29th May 16.60-16.80 Closed 16.00 17.50 (17.80) -0.70
LONG 08th – 12th June 15.70-15.90 Live 15.30 (15.50) 17.20

Platinum Technical Outlook

Weekly Chart

Platinum close with a doji and the price action this week will be crucial as to the next phase of the price action. A rising RSI and a green candle will give us a signal that a reversal is in place. Expect strong resistance from the 20 WMA to start with then the upper Bollinger band is the next target. Failure to reverse, sellers will continue to bully prices lower to test 10430 levels.

Trade: Looking for a potential short squeeze.
Position Valid Date Price Action Stop Loss Target Results
SHORT 15th – 19th June 1085 Live 1085

(1100)

1030 0

Palladium Technical Outlook

Weekly Chart

Palladium set a temporary low at 663.6 and the week ended with a doji outside the lower Bollinger band. The RSI is at oversold area and a bounce is due. Palladium remains a difficult market to trade and the damage on the chart suggests this is now a bear market and rallies are to be sold.

Trade:
Position Valid Date Price Action Stop Loss Target Results

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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