Gold, Silver and Oil Trading Outlook

Red's Weekly Gold, Silver and Crude Oil Report

The Overall Fundamentals for the week ending 17 June 2011

Greece concerns priced in

The commodity market stabilized Friday after slumping Thursday. Sovereign concerns in Greece remained and US data were mixed. But IMO most have been priced in and some players started bargain hunting as they thought the sell off was overextended.

The WTI Crude contract for July delivery fluctuated within a narrow range and closed flat while the August Brent Crude contract rebounded and ended the day gaining +0.89%.

Gold stayed firm as escalated debt problems in Greece upstaged strength in the USD.

EU's Economic and Monetary Affairs Commissioner Olli Rehn said that the review on Greece with the IMF will be concluded on next Sunday and by that time, 'the Eurogroup will be able to decide on the disbursement of the 5th tranche of the loans for Greece in early July'. Moreover, 'the Eurogroup on Sunday-Monday will discuss the contents and conditions of a successor program for Greece, and the nature of private sector involvement in this, with a the view to taking decisions at the next Eurogroup meeting of July 11′.

These comments comforted the market some but uncertainties remain as long as the new bailout plan for Greece is not finalized and losses of European banks are not estimated. Peripheral yield spreads continued to widen.

US data released Thursday were not all weak. While the Philly Fed manufacturing index fell to the negative territory, initial jobless claims dropped to a 4-wk low and housing permits climbed more than expected. The Philly Fed manufacturing index surprisingly plunged to -7.7 in June, the lowest level since July 2009, from +3.9 a month ago. The reading was disappointing as it signaled contraction in New York area. Initial jobless claims slipped -16K to 414K, the lowest level in 4 weeks, in the week ended June 11. The 4-wk average was maintained at 425K.

Home-building in US showed signs of improvement in May. Housing starts rose +3.51% m/m in May to 560 K as activities in the West jumped +18.1% increase in the West, more than offsetting declines in the Northeast and Midwest. Building permits increased +8.70% to 612 K during the month.

Friday the focus was on US confidence data and the University of Michigan survey.

Start Trading Gold, Silver and Oil in Minutes

The Overall Technical Outlook


Gold moved within a very tight range since Thursday, but this range resides above 38.2% Fibonacci retracement of CD leg for the Bearish harmonic Gartley pattern at 1522.00.

At the same time, RSI turned Neutral, while Stochastic attempted to show negative sign despite stabilizing above value of 50.00. That being the case I will hold to my Neutral anticipation until I get a clearer sign to ID the direction.

The trading range for Friday moved among the Key support at 1505.00 and Key resistance now at 1556.00.

The general trend over the short term basis is to the Northside, targeting 1600.00 as long as 1430.00 remains intact on the weekly closings.

Support: 1522.00, 1519.00, 1513.00, 1505.00, 1500.00

Resistance: 1532.00, 1537.00, 1549.00, 1556.00, 1562.00

Analyst's recommendation Based on the charts and explanations above my opinion is, stand aside until a clearer sign appears to ID the upcoming Big move. Stay tuned...



Silver is showing a Bearish tendency, but until now it could not achieve a 4 hour closing below 35.00 Zones since Thursday.

The proposed Elliott wave count remains valid asI believe that C wave of ZZ formation is in progress for the time being. As a consequence, I will keep my negative position intact and a break of 35.00 will confirm.

The trading range for Friday is among the Key support at 33.05 and Key resistance now at 37.45.

The general trend over short term IMO is to the Southside, targeting 26.65 as long a 48.50 remains intact on a weekly close.

Support : 35.00, 34.80, 34.50, 34.35, 33.90

Resistance: 35.65, 36.15, 36.35, 36.80, 37.00

Analyst's recommendation : Based on the charts and explanations above my opinion is, sell silver below 35.00 gradually targeting 33.90 and 33.05 , while the stop loss is a daily closing above 36.35 might be prudent. Stay tuned...


Crude Oil

A move in Crude Oil back above 94.45 will indicate a potential reversal Zone of the Bullish Butterfly pattern shown on the right of the image, while this level is the 127.2% extended target of the CD leg of the Bearish Bat pattern shown on the left.

The trading range for Friday was between the major support at 92.00 and the major resistance at 99.05.

The short term trend is to the Southside with steady daily closing below 109.75 targeting 85.40.

Support : 94.45, 93.80, 93.45, 92.75, 92.00

Resistance: 95.05, 96.30, 96.60, 97.70, 98.00

Analyst's recommendation Based on the charts and explanations above my opinion is buy Crude Oil around 94.45 (if and when it gets back there), and take profit in stages at 96.60 and 98.25. Stop loss with daily closing below 93.01. Stay tuned...


Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

For More Information Contact

Chutinush Taksinapinunt (ANISTA)

Business Development Director

Heffernan Capital Management

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics


Latest Markets Videos