Metals Turning Down From Resistance

It has been a while since my last article, simply because we have been busy developing a range of tools for investor and traders to use, but we have now completed renovations to our site and have once again opened our doors to the general public, and that in turn has freed me up to write a bit more regularly. We have added a great many new features of which you can avail yourselves, and I think you are going to like the tools on offer – certainly, we do, and our fine tuning has been paying dividends over the last 3 months. 

Since gold (GLD ) and silver (SLV) appear to be perched at resistance and are likely to pullback in the near term, the timing is pretty good for an article on the metals. In my last article (Nov 2016)  we were looking for a low to form in the near term, and should you re-read it you’ll see that the support range we quoted held and we have been rising fairly steadily into our resistance target ever since. 

Now we are at a logical place to pause, and the question we need to ask is whether the prospective top forming at present is simply consolidation before the next leg higher, or a more sustainable swing high. 

Headline Risk Will Dominate This Summer

There is a confluence of scheduled national votes throughout Europe this summer, with elections coming thick and fast among the powerhouse economies of France, Germany and Britain. The polls going into these dates, and the outcome of the elections themselves will very likely result in currency volatility which in turn will affect the performance of the metals, especially gold which is still viewed by many as a quasi-currency or monetary metal. 

If we look back to the Brexit referendum and the Trump election, we can see that the British Pound and the US Dollar both moved wildly into and then after their respective events. Metals held up well in both cases going into the votes and we expect a similar outcome here, with the twists and turns in play this summer keeping a bid under the metals markets as many will look to hedge against what may be extreme moves in the FX market subsequent to the election results.