HardAssetsInvestor

Written by Sumit Roy  |

February 14, 2012

Precious Metals Monitor: Silver’s Range Narrows Below Important Resistance Level, Palladium Trades In A Channel

Details

We offer our latest analysis on the precious metals market.

This past week was a slow one for precious metals, as the sector continues to consolidate in a narrow range after surging earlier this year.

Spot Gold:

Source: Bloomberg

Gold has been fluctuating between $1706 and $1765, while silver has been in a narrow band between $33 and $34.50.

Spot Silver:

Source: Bloomberg

In our view, both monetary metals are merely pausing before an eventual resumption of this year’s uptrend. The next levels of resistance lie at $1800 and $1900 for gold, and between $35.50 and $36.50 for silver.

Meanwhile, platinum finally took a breather after rallying relentlessly since the start of the year. It tested a key level at $1675 last week, but was unable to break out. Like gold, platinum is likely merely digesting recent gains.

Indeed, platinum may continue to outperform gold in the short term as it makes up for last year’s underperformance. An improving economic outlook bodes well for platinum jewelry fabrication and industrial demand — the reverse of the situation we saw last year amid eurozone sovereign debt-related economic concerns.

Spot Platinum:

Source: Bloomberg

Likewise, fellow-autocatalyst palladium has been trending up, but the technicals are a bit different. The metal is in a channel and looks poised to move a bit lower as it drops toward the lower end of the range.

Spot Palladium:

Source: Bloomberg