Use uptrend channel support points to initiate longs
Despite a bearish wave of risk-off psychology and weakness in other precious metals, the gold market is attempting to hold modest gains early today. This suggests the bull camp remains confident and hopeful of a resumption of the downward track in the US dollar. The dollar is tracking lower early today and sits 70 points below yesterday's high, with the downtrend pattern on the charts leaving the prevailing direction down.
MARKET IDEAS: Even though we see value in February Gold at the psychological $1,900 level, we also see the market temporarily violating that level and returning to midmonth pricing if around $1,875. With a significant range down failure yesterday in March Silver and a large daily outflow from ETF instruments, we see near term downside targeting at $23.30 and then at $23.22.
MARKET IDEAS: While the copper market has shown significant resiliency and has consistently managed to mold Chinese news into a positive, the market was significantly overbought and in need of a cleansing break. Bloomberg reported overnight indicated that Chinese copper investors were turning cautious on copper, and with the Lunar New Year holiday approaching, they might be less likely to be in position to bargain-hunt on a correction.
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