Tuesday, March 9, 2010

Gold Market Commentary For Tuesday Evening

Gold closed lower on Tuesday due to profit taking triggered by strength in the US Dollar. A late day rally tempered early losses and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 1113.50 are needed to confirm that a short term top has been posted. If April extends the rally off February's low, January's high crossing at 1166.70 is the next upside target. First resistance is last Wednesday's high crossing at 1145.80. Second resistance is January's high crossing at 1166.70. First support is the 20 day moving average crossing at 1113.50. Second support is the reaction low crossing at 1088.50.

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Silver closed slightly higher due to late day rally on Tuesday as it consolidates above the 50% retracement level of the December-February decline crossing at 17.092. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If May extends the rally off February's low, the 62% retracement level of the aforementioned decline crossing at 17.659 is the next upside target. Closes below the 20 day moving average crossing at 16.372 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 17.530. Second resistance is the 62% retracement level of the December-February decline crossing at 17.659. First support is the 10 day moving average crossing at 16.859. Second support is the 20 day moving average crossing at 16.372.

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The U.S. Dollar closed higher due to short covering on Tuesday as it extends the trading range of the past five weeks. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 79.92 are needed to confirm a downside breakout of the aforementioned trading range and would open the door for a larger degree decline into spring. If June renews this winter's rally, weekly resistance crossing at 81.97 is the next upside target. First resistance is the reaction high crossing at 81.70. Second resistance is weekly resistance crossing at 81.97. First support is last Wednesday's low crossing at 80.14. Second support is the reaction low crossing at 79.92.

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