Tech Musing Review - commodities

Yesterday was one of the most volatile day in precious metals history, Gold and silver both corrected by around 10%. I initiated a bearish call on gold on 14^th December 2012 and reiterated my call on 16^th February 2013. Since then gold is down by 20% while silver is down by 30%

The downside momentum in gold was much sharper than I expected. I felt that gold will give a pause around 1520 before it crash to 1435 levels and below.  

If we look at the long term chart of gold we can see that quarterly trend line support in gold is exactly at 1350 levels.  38.2% retracement will be over at 1200 levels and 50% retracement will be over at 1000 levels. 

AS per my chart reading unless gold falls below 1000 level it will still be in a uptrend. This correction is just second leg of a large upmove. But since the upmove itself lasted for more than 10 years this correction will may also last for 3 years or more. Hence I don’t expect any sustained bull run in gold anytime sooner, but I am also not a long term bear on gold unless it breaks below 1000. My best guess is that gold will move down and consolidate towards 1200 levels.

Similarly silver corrected much more than gold and is down by 30% since 14^th December.

 

Similarly I initiated my short call on Crude oil on 29^th September 2012 @ 92USD and reiterated my call on 16^th February 2013 @ 95.86 USD.

Nymex crude has also corrected to 87.33 USD a barrel today. I expect this correction to continue and Nymex crude to fell around 80 USD levels.

 

Summary:-

1.      Expect gold to consolidate at 1200 levels.

2.      Expect silver to consolidate at around 20 USD levels

3.      Expect Nymex crude to fall to 80 USD levels