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New~ Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

2017-06-16 04:38 [METALS] Source:Netword
Guide:Gold futures have backed off recently, from highs scored in November. The rebound in the U.S. dollar and decline in crude oil prices are mainly respons

Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

By: Jim Wyckoff | Wed, Dec 12, 2007

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Gold futures have backed off recently, from highs scored in November. The rebound in the U.S. dollar and decline in crude oil prices are mainly responsible for gold backing off. Gold will continue to be strongly influenced by the dollar and crude. My bias is that the dollar is close to putting in a major bottom, if it has not already done so. It's also my bias that crude oil has put in at least a near-term market top, if not a major market top. Thus, I can't be too excited about the uspside prospects for gold in the coming weeks.

new~ Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

See on the weekly continuation chart for nearby gold futures that one uptrend line has recently been penetrated on the downside. Also, recent price action on the weekly chart has formed a potentially bearish descending triangle pattern.

However, no serious longer-term technical damage has yet been produced in the gold futures market.

Silver to Continue to Follow Gold

Generally, silver is going to be a follower of its big brother, gold. See on the weekly continuation chart for nearby silver futures that recent price action has penetrated on the downside and negated a longer-term uptrend line. See, too, that the past rallies in silver have petered out around, or just above, longer-term technical resistance at the $15.00 level. A drop in nearby silver futures prices below solid longer-term chart support at the $13.25 level would be significantly longer-term bearish to suggest a major market top is in place.

new~ Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

But at present, no serious longer-term technical damage has yet been produced in the silver futures market.

Keep an Eye on Copper

Veteran traders know that the red industrial metal, copper, can be a leading indicator for the health of the U.S. stock market and the U.S. economy. See on the weekly continuation chart for nearby copper futures that prices are in a longer-term downtrend after posting a bearish triple-top reversal pattern on the weekly chart.

new~ Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

Serious longer-term technical damage has been inflicted in the copper market. A drop below strong technical support at the recent low, as seen on the chart, would produce more serious longer-term chart damage.

Greenback is Key "Outside Market"

Gold, silver and copper futures traders will continue to closely monitor the value of the U.S. dollar versus the other major currencies in the world.

The daily chart for the U.S. dollar index futures shows an impressive recent recovery from the contract and all-time low. And a weekly high close in the U.S. dollar index futures on Friday would be more near-term bullish technical news.

See on the weekly continuation chart for nearby U.S. dollar index futures that bulls still have some more work to do to begin to suggest, from a longer-term technical basis, that a major market low is in place. However, do note that just this week the dollar index has poked above a downtrend line.

new~ Precious Metals, Copper Traders Closely Monitoring U.S. Dollar

Again, my bias is that there is not much left on the downside in the U.S. dollar index. However, a push to a fresh low in the index would be seriously bearish and open the door to another solid leg down in prices in the coming weeks, or longer.

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Author: Jim Wyckoff

Jim Wyckoff
Senior Market Strategist

Jim Wyckoff is the proprietor of the "Jim Wyckoff on the Markets" analytical, educational and trading advisory service (). He is also a technical analyst for Dow Jones Newswires and the senior market analyst with TradingEducation.com and Wisdom financial. Jim is also a consultant with the highly respected "Pro Farmer" agricultural advisory service. Jim was also the head equities analyst at CapitalistEdge.com. He received his degree from Iowa State University in Ames, Iowa, where he studied journalism and economics.

Jim has spent nearly 25 years involved with the stock, Financial and commodity markets. He was a Financial journalist with the FWN newswire service for many years, including stints as a reporter on the rough-and-tumble commodity futures trading floors in Chicago and new York. As a journalist, he has covered every futures market traded in the U.S., at one time or another.

It didn't take Jim long to realize the successful traders and analysts in every market -- be it pork bellies, Treasury bonds or stock index futures -- had a common thread among them: nearly all relied on technical analysis to give them an edge.

(EDIT:admin)

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