In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the commodity bloc heading into the yearly close.
Gold Weekly Chart
Notes: Gold prices rebounded off critical confluence support last week at 1240 with advance now eyeing initial resistance at the November high-week close / 2017 trendline resistance at ~1279. Heading into the open of 2018 trade, the focus remains weighted to the topside while above the December lows with broader bullish invalidation down at 1204/08. A breach higher from here still has to contend with the April swing highs at 1295.
Bottom line: We’ll be looking to fade weakness while above 1240 heading into the start of the year with a breach above 1295 needed to mark resumption of the broader uptrend in Gold prices. Such a scenario targets subsequent resistance objectives at the 2017 high-week close at 1349 backed by 1380/92.
Copper Weekly Chart
Notes: Copper prices have continued to trade within the confines of a well-defined ascending pitchfork formation extending off the 2016 lows. A breach above the 2017 yearly opening range in July fueled a rally into the upper median-line parallel which capped the advance back in October. A parallel extending off 2015 September high (red) has continued to offer near-term support with prices rebounding off this mark earlier this month. Note that continued bearish divergence highlights the risk of a near-term pullback here.
Bottom line: Heading into the yearly close I’ll be looking for a final exhaustion rally into the 3.33/36 before a larger correction. This zone is defined by the 100% extension of the 2016 rally & the 61.8% retracement of the 2011 decline and converges on the upper median-line parallel into the 2018 open. Interim support rests at 2.95 with broader bullish invalidation down at 2.80.
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