Gold Continues to Show Possible Support At Current Price Levels

Although gold prices had a modest gain today, the fact is that for the first time in nine trading days pricing did not contain a lower low than the previous day. Ever since gold prices reached this year’s high on February 20^th at $1350 per ounce, subsequent trading days were characterized by containing a lower high than the previous trading session. On the majority of those days the price range in gold also contained a lower low,

These two factors (lower high and lower low) are a major characteristic on a market which is exhibiting declining pricing and is one of the easiest ways to determine current trend. On Friday March 1^st, gold prices broke below its 50-day moving average. Gold had been trading effectively above its 50-day since November 28^th of last year.

Gold futures basis the most active April contract is currently trading up $3.30 (+0.26%), and fixed at $1288. Noteworthy is the high of $1291.80 that is effectively stalling at the current resistance level. This resistance level is based on a .38% Fibonacci retracement which covers the entire length of the last leg of this rally which began at $1195 and ended at $1350. This level falls at $1291.20 and is the first price point that needs to be taken out to obtain technical evidence that the current correction has run its course and concluded.

The major technical level that gold needs to trade above is the 50- day moving average. However, it remains above both the 100-day and 200-day moving average. Which means that on an interim and long-term basis gold is still maintaining a bullish trend although it is currently in a corrective stage. A break above the 50 day moving average would indicate that gold’s move back into a short-term bullish trend as well.

Traders continue to wait for Friday’s release of the U.S. jobs report. Currently it is forecasted to come in at approximately 180,000 jobs added last month. Today’s ADP national employment report revealed that 183,000 jobs were added last month in line with expectations.

Palladium Reverses After Four Days of Lower Pricing

Palladium once again has returned to the limelight with more than respectable gains today. Palladium futures are currently trading at $1493.70, which is a net gain of almost 2%, gaining $27.80 on the day. It seems as though palladium is destined to move back above $1500 per ounce with unique factors which have driven prices higher obviously still in play. The industrious white metal continues to be the most expensive precious metal (with the exception of rhodium).

Wishing you as always, good trading,

Gary Wagner