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Daily Commodity Spot: Are Gold, Silver Week-Ending Rallies Sustainable Into New Year?


A breakdown of the day's seven most active commodity futures.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: Precious metals bounced big into the weekend, into year-end, building on Thursday's reaction up from new lows. But no relevant resistance was recovered, and plenty of unfinished business below was left outstanding to keep the sell-off alive into the New Year.

Dollar Basket
March Contract (DX, ETF: (UUP, UDN))
Wednesday's recovery above 80.40 had targeted 80.85 which was met by noon, and 81.25 which was met before Thursday's open. The complete retracement back down to 80.85 left outstanding the gap back up to Thursday's 81.15 open to be filled. But that didn't prevent Friday's session from drifting lower - to 80.40. Its reaction up was already attacking 80.85, with 81.15's retest likely.

March Contract EC, ETF: (FXE)
Thursday's recovery had peaked upon filling the gap back to Wednesday's close and probing it briefly to 1.2950-1.2965. Buyers gained no traction for that effort, but momentum did not reverse back down. Friday exploited the lack of a setup by drifting higher to 1.3000 resistance. But the year ended by drifting back down under the 1.2950-1.2965 range, with Thursday's opening gap below at 1.2896 likely to attract price back down.

Febuary Contract GC, ETF: (GLD)
Friday's open gapped up to test Wednesday's 1564.60 close, and extended up to 1582.80. That's quite the distance from Thursday's 1523.90 low. And it is 61.8% back to the prior week's 1620.30 intraday high. The close fell back to 1565.00, holding 1568.00 resistance to maintain the bounce as a correction. Anyway, Island's don't launch durable reversals, only temporary, and the Island that from Friday's session requires a retest.

March Contract SI, ETF: (SLV)
The decline's initial target had been 27.90, which was met Wednesday on the way down to 26.14. Friday's open gapped up to 27.90, and closed back at it, despite having extended higher intraday to 28.46. An attack on the lows is likely next, at least down to 26.50.

30-year Treasury
March Contract US, ETF: (TLT)
Two sessions spent testing the 144-18 bounce limit did not prevent another rally effort Friday morning. But the higher highs peaked at 145-08 and reversed back down to within 1 tick of 144-18. A reversal down remains likely, regardless of Friday's extra probe higher - and more so because of it.

Crude Oil
March Contract CL, ETF: (USO)
Having held 99.00-99.40's pullback limit Thursday, the pattern only awaits a new rally leg gaining traction to target a test of 103.00. Friday wasn't it. The open gapped down to test Thursday's lows, then recovered enough to fill the gap back to Thursday's 99.85 close. Repeated attempts to probe higher failed, so another test of 99.00-99.40 is possible. But fresh highs above 99.85 should extend sharply higher.

Natural Gas
March Contract NG, ETF: (UNG)
Drifting lower Friday to $3 didn't change the 3.09 trigger for a rally. But drifting lower on a Friday did make a rally leg more difficult since this market tends to duplicate Friday's action Monday morning. The New Year's holiday may buck that influence, but leaving a gap outstanding back to Friday's new low close won't allow a durable rally to form.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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