Solid Performance in Precious Metals Pricing Indicates Price Support

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The precious metals are all experiencing moderate to strongly higher pricing today. The net result is a strong weekly gain for gold and palladium, and fractional moves in silver and platinum. Although both silver and platinum had solid gains on the day, on a weekly basis silver gained approximately five cents and platinum lost approximately two dollars.

Higher pricing today was aided by tailwinds provided by dollar weakness, and hindered by strong economic data and gains across the board in U.S. equities. The U.S. dollar index lost 0.16% today, and after trading to 98.08 profit taking took the index back below that level and closed at 97.76.

U.S. equities as expressed through the major indices all contained small and measured gains. On a weekly basis the NASDAQ composite closed just off of its high this week, and as of 4:08 PM Eastern standard time is still settling but currently fixed at 8131.17 which is a net gain of over 12 points on the day. But most importantly is the highest weekly finish in history. Considering that the index hit a low of 6200 in December of last year, the NASDAQ has gained almost 2000 points since then.

Overall in light of a strong bullish market sentiment for U.S. equities, and recent dollar strength, the precious metals have been able to hold their own and weather this most recent correction.

In terms of extreme range and price-performance the clear winner this week was palladium. This precious metal had a weekly range of just over $100, and a weekly gain of approximately $44. The strong weekly finish was really a result of today’s price gains which amounted to 3.38% or $47.50. Currently palladium futures are fixed at $1454.40. Although the gains are substantial, volume in the futures contract remain sparse and light at best.

In the case of gold after hitting the lowest price point this year of $1267 on Tuesday, today’s $8.30 gain and close at $1288 is clearly an indication that there is extreme support for gold pricing at those lows. Today’s upside move also indicates that on a technical basis recent price action this week took the precious yellow metal into over sold territory in which market participants began to look at current pricing as undervalued rather than overvalued.

On a technical basis we currently see major support for gold pricing at $1271 with resistance at $1291. This resistance level is based upon a .38% Fibonacci retracement. If gold can continue to gain value next week and that momentum moves pricing basis the June futures contract above $1292 on a closing basis gold could easily once again test $1300 per ounce.

Wishing you, as always, good trading,

Gary S. Wagner - Executive Producer