Gold and Silver Futures Trading

As on Thursday on 27-08-2009

Market Commentary

Gold Futures opened at 944.75/945.75 in New York. Good buying carried the metal

higher, peaking at 949.25/950.25. However this rally could not be sustained as the

metal retreated, following a weaker dollar, slipping to an intraday low of

939.50/940.50. Better than expected housing sales helped equities climb and Gold Futures

made back lost ground. Resistance was established near 945.00 and it trade

erratically within a range, finally settling at 944.25/945.25.

Silver Futures opened at 1430.00/1433.00 and climbed on the back of stronger base metals

and oil, reaching a high of 1440.00/1443.00. However the metal later became

well offered and it lost ground as the session progressed. Persistent selling

dragged Silver Futures to an intraday low of 1416.00/1419.00 before gathering strength. It

traded lightly within a range for the remainder of the day, ticking marginally higher

to finally settle at 1426.00/1429.00

Technical Commentary

Gold Futures is closing right where it closed yesterday at current 945. In Japanese candle

sticks this is known as a Doji with both bulls and bears indecisive on the direction.

The shrinking ranges are often warnings of a pending break out but the question of

"when" is still a mystery. The lower tops in August of 971, 960 and 957 signal that

the market is a bit tired but we will need to break 930 to bring in the sellers.

Silver Futures is showing as a slight up day at 14.30. Silver is interesting because of the

nasty price action last week that saw the unit drop from 15.19 to 13.52. We believe

that while Silver Futures holds below 14.55 the risk is another drop lower. 14.55 represents

the 61.8% of last weeks drop. We expect sellers to come in below this weeks low

of 14.09. The Gold Futures and Silver futures ratio has moved lower for the 4th day in a row to current

66.05. We suspect that the risk is for a quick move higher back to last weeks high

of 67.54.