Precious metals will likely continue to consolidate a bit more next week

February 9, 2006
By Benjamin Train

Precious metals and oil are opening a bit bullish from overnight up actions. Today's Gold opens at $556.30 and may raise on a short term bull to over the next area of resistance that is around $558.20 per ounce. This market will probably continue to be quite volatile.

According to http://www.nsfutures.com/ U.S. metals commentary, "Negative momentum studies in the neutral zone will tend to reinforce lower price action. The major trend has turned down with the cross over back below the 18-day moving average. The market's close below the pivot swing number is a mildly negative setup. The next downside objective is 545.3. The next area of resistance is around 557.7 and 561.0, while 1st support hits today at 549.9 and below there at 545.3."

March silver more or less held support yesterday at the top of the January consolidation and managed to close higher on the day and could be on the way back to the contract highs at 9.95. Look for first resistance in March silver at the Feb 1 low of 9.68. The next downside target is now at 9.20. The next area of resistance is around 9.54 and 9.62, while 1st support hits today at 9.33 and below there at 9.20.

Gold finished last Friday at $558, up about $3 while Silver sky rocketedup to $9.57. There were signs of extreme froth at that point, and we were clearly in overbought territory, however, precious metals remained in an upward trend. The bias in the gold and silver markets remain intact until Tuesday's major drop in precious metals market worldwide.

Look for precious metals to continue its consolidation next week, and reaching its low point at the options expiration date of Feb, 17th.

For a good article on the precious metals market, read the "Market Summary" at FreeMarketNews:
http://www.freemarketnews.com/Analysis/176/3658/2006-02-03.asp?wid=176&nid=3658