Precious Metal Weekly – Unwavering US Dollar?
Last minute talks between Greek officials and its creditors are said to come close to an agreement of sort. Promises were made and the market is positioned for a resolution before the 5th of June deadline. Eur/Usd is trading higher by the close of the week despite a resilient US dollar index. However, European equities took a big hit after rumour of a resolution has been found was quickly dissolve. If there is any comfort for Greece, a resolution of some sort will be made available so as to avert disaster. The weekend Telegraph review the situation in Greece and the frustration of Mr Barroso who added “I believe that a solution can still be found”. Media focus is on this Wednesday 3rd June ECB press conference where questions and answers will provide volatility.
At the start of next week, US PMI data is in focus followed by RBA rate statement and inflation report from the Eurozone. Close to the end of the week, we have BOE interest rate decision which is expected to remain as it is and then US initial jobless claims and a Friday data with Eurozone GDP numbers. It is not going to be a dull week but various key economic data that traders need to digest. Having said that, the volatility can provide opportunity but also risks of a bigger trading range. Therefore, do include a good stop loss for risk management purposes.
Our top focus is on the US dollar index which looks ready to roll over and a weaker equity market that look rather exhausted (sure it can be invalidated by super V recovery if dip buying is still around).
Gold Technical Outlook
Weekly Chart
Should the US dollar index start to roll over, a corrective rally could finally start. We remain steadfast on our previous statement that gold could embark on a rally to $ 1267 (100 WMA is now at 1263).
| Trade: Looking to build on Pullbacks to capture the corrective rally. |
| Position | Valid Date | Price | Action | Stop Loss | Target | Results |
| LONG | 18th – 22nd May | 1195-1210 | Live | 1170 (1178) | 1233 | |
| LONG | 25th – 29th May | 1185-1200 | Live | 1170 (1178) | 1245 (1267) |
| 20 WMA | 50 WMA | 100 WMA |
| 1211 | 1230 | 1263 |
Silver Technical Outlook
Weekly Chart
The pullback has happened as anticipated and our long trade has been initiated. We are changing our target on Silver and see 17.50 as potential resistance to the upside. Technically, the weekly RSI suggest there are more rooms to the upside and this run up remains a corrective rally. Should we break beyond 17.50 we will be very cautious and look to enter a short positions.
| Trade: Pullback is still a buy. Valid for this week only. |
| Position | Valid Date | Price | Action | Stop Loss | Target | Results |
| LONG | 25th – 29th May | 16.60-16.80 | Live | 16.00 | 17.50 (17.80) |
| 20 WMA | 50 WMA | 100 WMA |
| 16.68 | 17.55 | 19.06 |
Platinum Technical Outlook
Weekly Chart
A major concern on the weakness over the week as platinum prices plunged below all previous support zones. The next question is – can platinum recover from here and what could be the catalyst? The pullback was more of an impulsive selling with no real interest of short covering or bargain hunting. The 20 WMA previously acted as resistance and current price action should retrace and test it again. However, we are not ruling out a potential selloff to retest previous low of 1086 (even to 1078 – which make the lower BB) before a reversal.
| Trade: Buy the pullback valid for the next 2 weeks. |
| Position | Valid Date | Price | Action | Stop Loss | Target | Results |
| LONG | 18th – 22nd May | 1136-1146 | Closed | 1117 | 1170 (1185) | -23 |
| LONG | 25th – 29th May | 1126-1136 | Closed | 1117 | 1170 | -13 |
| 20 WMA | 50 WMA | 100 WMA |
| 1169 | 1266 | 1347 |
Palladium Technical Outlook
Weekly Chart
Our daily commentary already covered our biased view that Palladium is dominated by seller and will continue to do so. The weekly MA are all rolling lower and a retest of the 200 WMA could potentially be the target at 722.
| Trade: Side line for now with a bias to the downside. |
| Position | Valid Date | Price | Action | Stop Loss | Target | Results |
| 20 WMA | 50 WMA | 100 WMA |
| 778 | 805 | 776 |
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