2008 New Years Report – Metals
The Metals have been having some good time the last few years. The precious metals have continued the advance, but the none precious metals have not been so lucky. We believe that there are many profitable opportunities in the metals, mostly the precious metals, even though a short term trading in the none precious metals could turn out to be profitable.
Aluminium
After several bullish years, 2007 was not a very good year for aluminium. With the first few months being barred by a resistance around 129 cents, the metal began to fall in the middle of the year. Aluminium has been stuck under a resistance that was formed in the middle of the year 2006. Not having been able to break through that resistance, the metal gave in. For the moment a support for the bull market has formed on the monthly chart, around the 105 mark. The first months of 2008 will give an indication about which way the price of aluminium will go, but for the moment the bears seem to be in charge, with the next support level being around 87 cents.
Copper
The bullish characteristics of the copper have mostly been credited to the housing boom in the US and the massive expansion in China. The construction frenzy in other regions has also added to the move. When looking at the long term chart, it’s obvious that the copper has been having a rather difficult time the last year and a half. With the sub prime crises in the US and the end of the Chinese pre-Olympics constructions, the copper is going to have a difficult time regaining its strength. The long term resistance level, which the copper has not been able to penetrate, seems to be holding, but the copper seems to have lost some strength in its present price movement as it seems to have set a new tunnel under the one that the metal traded most of last year. On the weekly chart, copper has made a three top formation and following the last top, fell below the low of that tunnel and has not been able to break above it again. 2008 could be a difficult year for the copper, but with the overall bullish sentiment in commodities, copper could profit from that. On the other hand, the economic turmoil, that still seem to have some time left, will probably help maintain the resistance level at around 378 cents. But even if the present low will hold and the price stays under the 378 cents, a trader can make a good profit from the swing as the distance from the low to the resistance is around 21,000 USD. If the copper moves out of the trading range, it could move upward as well as downward, even though a downward move would be more likely.
Palladium
After having a rather uneventful trading for years, the Palladium began to move aggressively upward in the beginning of 1997 until it topped in early 2001, going from around 127 cents to around 1,090 or almost nine fold increase. With the bursting of the bubble, the Palladium fell and after a little bounce, has been kept under a resistance level at around 375 cents since around May 2006, with 2007 not doing anything special. The daily and weekly charts don’t seem to offer any signs of higher prices, even though the monthly chart is showing some strength, it does not give strong indications for higher prices. But if the resistance is broken, a move to around 616 cents can be expected.
Platinum
The bullish move of Platinum that started in late 2001, continued in 2007. The move has been quite stable, with a small correctional pause in 2006, followed by a confirmation support being formed in the beginning of 2007. Long term look at the Platinum doesn’t give any reason to expect anything stopping this bullish trend. Even though the Platinum showed some divergence between the Slow Stochastic indicator (SSTO) and the price movement in late 2007, it should be considered an indication of a minor correction, rather than an indication of a bearish takeover. Looking at the weekly chart, a support at around 1,485 cents should hold. Should that be passed a price of around 1,350 would be the next support level. The likelihood of the prices dropping that far should be considered quite unlikely, even though nothing is impossible when it comes to the markets. For 2008, there is no indication this bullish market will not continue.
Gold
After a rather flat trading since 2006, when the gold reached the 700 cents target, the gold took of in July 2007 reaching almost 836 cents in November. Having shown signs of a imminent correction, gold fell to around 780 before it fell into a sideways trading the last month of the year. Having been supported by what seemed to be a rather weak support, gold collected some strength, and in the first trading days of 2008, broke the high of 2007. The “cooling off” area of December, has formed into a good support level on the daily and weekly charts, if the gold manages to close above it the next few days. This area does not indicate a strong support level on the monthly chart, but in these days of bullish attitudes in the commodities markets, a week support seems to be enough to hold any bullish tendencies. Gold has been the favourite of the market, along with crude oil, and as such will continue it’s bullish trend into 2008.
Silver
Silver has been following gold for some time now and had some difficult resistance to fight since 2006. Unlike gold, silver has not been able to break through that resistance and make a firm base. But with gold reaching higher, it’s not unlikely that silver will follow suite. As of now there are no indications to which way the silver will go, but when looking at gold, a continuing of the bullish sentiment should be expected rather than a strong bearish move.
