Commodities | May 25 2007
Gold and that elusive US$700/oz… Trading guru Dennis Gartman is happily sitting on the sidelines these days, advising his clientele at the high end of the financial spectrum to do the same.
Technical chartists at Barclays Capital can only agree, reversing their bullish bias into a worrisome view. Gold has to bounce back and quickly, the chartists warned earlier in the week, to recapture its bullish momentum. Previously they seemed rather confident this would happen, but not anymore.
“We are becoming increasingly concerned that thoughts of a retest of [US$]695 will have to be put on ice for quite some time to come”, Barclays chartists report today. Their assessment yesterday wasn’t exactly cheerful either.
Thus far, they believe retracement levels at US$646/oz and US$653/oz remain “broadly intact” but just so that we all understand what’s occurring in the market: if and when the metal closes below US$646/oz they would “cut and run”.
The longer gold takes to rally back up, the harder it will be to find its former strength again, they believe.
As far as gold’s little brother silver is concerned, the metal seems caught between its one-month (US$13.20/oz) and one-year average (US$12.53/oz) and it would now appear silver has landed in an impasse, the chartists observe.
Momentum for silver still marginally favours the upside, however, and a close above US$13.30/oz would imply the potential for a return to last year’s high. But can it happen without gold improving its act?