Precious metals began the week with a quiet Asian session that saw all four precious metals drift lower on light volume. Selling interest picked up a bit during the European morning, as all four metals continued to probe lower with volume remaining below average. In early U.S. trading, gold and silver are bouncing and trading above Friday’s close, while platinum and palladium have just made new intra-day lows.
Technically, gold and silver are on the ropes, as short sellers continue to feel empowered as witnessed by speculative short positions which increased sharply in both metals last week on the futures exchange. With this in mind, a news event or a wave of buying could set the stage for another in the long line of “nasty” short covering rallies. Buy stops are likely looming above $1,255.00, $1,275.00 and $1,295.00 and $1,305.00 in gold while the same should be expected in silver if it breaks $19.00, $19.20, $19.50, $19.75 and $20.10. Failing to break any of the resistance levels just mentioned, gold and silver will be targeting $1,225.00 and $18.50.
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