Gold Continues to See Heavy Selling Pressure on Every Rally

Gold

• Gold (XAU/USD) continues to hit heavy selling pressure on every rally, as we established a week ago.
• Yesterday we collapsed to support at 2904/00 but longs were stopped below 2895 before the expected bounce.
• The market has transitioned to a new phase of higher volatility and I think this will last a significant period of time - weeks, not days.
• This is typical of the next phase of a reversal or topping pattern.
• It is increasingly unlikely that Gold will reach $3000 at this stage.
• Bears are gaining control as more supply hits the market.
• The bulls have certainly not given up and will continue to buy when prices drop as we saw yesterday, (but my levels were out unfortunately).
• We can expect strong bounces even if we establish a short-term bear trend.
• The increased volatility calls for wider stops going forward, but we will also have wider targets to compensate.
• I will look to sell on rallies but also buy on big drops as I expect a sideways trend to develop.
• We should have a good sell opportunity at 2924/29.
  Shorts need stops above 2938.
  Targets: 2916, 2904.
• A buying opportunity at 2901/2896 and longs need stops below 2886.
  Targets: 2911, 2919.
• A break below 2885 however is a short-term sell signal targeting support at 2870/65 for profit taking on shorts.

Silver

1. Silver (XAG/USD) we wrote: Holding below 3230/40 targets 3170/60. If we continue lower look for 3135/25.
2. Silver made a high for the day at 3249 so shorts at 3230/40 worked perfectly on the collapse to my 2 targets of 3170/60 and 3135/25.
   A low for the day exactly here in fact.
3. Silver is more difficult to read as we remain in an erratic longer-term sideways channel, with no clear trend or pattern to guide us.
4. We should meet resistance at 3220/40 but shorts need stops above 3260.
   Targets: 3170/60 and 3135/25.
5. At this stage, I cannot find support where I would be willing to try a long.

WTI Crude April Future

Last session low and high: 6868 - 7126.
(To compare the spread with the contract that you trade).

• WTI Crude bounced from 6980 to the target of 7080/7100, almost as far as resistance at 7140/60.
• However unfortunately we made a high for the day just below at 7126, which is frustrating as prices then collapsed as expected.
• The break below 6990 was a range breakout sell signal targeting 6945/25 and as far as 6900/6880 for profit taking on shorts.
• Well done if you caught the second half of the move low and took profit at 6900/6880 - we saw a low for the day exactly here in fact.
• We now meet 6-month ascending trend line support at 6860/6840. I am not too confident that this will hold after the break of the February consolidation yesterday.
  A break below 6830 therefore could be a sell signal targeting 6775 and 6710/6700.
• However, a bounce from trend line support at 6860/6840 can target resistance at 6960/90 for profit-taking on longs.
  Shorts here need stops above 7030.