Possible correction on Commodities

The past few weeks have been strong for commodities (GOLD, SILVER, etc.) mainly due to the USD downswing and the surge in North Korea. Prices have reached serious and key levels of resistance where we can see cooling demand and technical adjustments. This is also supported by the new situation at the beginning of this week, when the resale dollar for hurricanes can recover part of its losses as well as lowering the risk, as there is no new nuclear experience from the DPRK.

GOLD reached key resistances - zone $1344-$1365, where there was a 38.2% Fibo correction of weekly chart from top to bottom reached 29.11.2015. The possible rise in USD could result in a short-term fix here to levels 1300-1310 dollars . Of course the risk is not gone, but the next few days may be strong for the USD. All hurricane damage needs to be recovered, and that means more economy, more orders - stronger indices, lower GOLD.

Technically there is a price divergence DeM indicator. The indicator has a lower peak and rotates from top to bottom as the price registers a higher peak than the previous one. This means price momentum and unwarranted rise. The correction is very likely.

The silver situation is identical.

Stefan D. Angelov - Head of Stocks Trading

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