More Of The Same As Greece and Technicals Weigh On Gold

Published on Thursday, 09 February 2012 17:40 Written by Todd Shriber

New York, February 9^th (TradersHuddle.com) – It was another glum day at the office for gold futures as technical pressure and concerns about Greece sent bulls out of the market. Comex gold for April delivery gained $9.90 an ounce at $1,741.20, but spot prices were down after the futures market closed along with the major gold ETFs such as the SPDR Gold Shares (NYSE: GLD) and the iShares Gold Trust (NYSE: IAU). News pertaining to Greece was actually decent today as European Central Bank President Mario Draghi said Greek politicians have endorsed an austerity package that many expect will help the country avoid sovereign debt default.

That wasn’t enough to warm the hearts and minds of precious metals traders as all the major precious metals ETFs were lower late in Thursday’s session. The iShares Silver Trust (NYSE: SLV) was off half a percent, but that decline was spotted on weak volume. The ETFS Physical Platinum Shares (NYSE: PPLT) was off 0.6% on above average volume. Today’s action in PPLT confirms our view that the $164-$165 is indeed critical resistance as it appears buyers and sellers are set to engage in a few days of intense battle in this area. Whatever group waves the white flag first will determine PPLT’s near-term fortunes.

A similar scenario is playing out with the ETFS Physical Palladium Shares (NYSE: PALL), which teased investors yesterday with a close above $70. With less than five minutes left in the trading day, it doesn’t look like PALL will close above that important number. While there are similarities between the technical battles being fought by PALL and PPLT, one key difference is that despite the fact that PALL will likely closer down today by almost 1%, that decline came on volume that wasn’t even half the daily average.

That weak selling pressure could mean the bears really have no ammunition left and in the face of positive U.S. and European economic news, it’s hard to imagine palladium will be viewed as valid short play.

It was another day of declines for the miners as the Market Vectors Gold Miners ETF (NYSE: GDX) and the Global X Silver Miners ETF (NYSE: SIL) were both spotted lower by 0.4% late Thursday. Once again, the selling pressure was more intense in the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ). Late Thursday, that ETF had come to a dead stop at its 20-day moving average, confirming our thoughts from Wednesday that the 20-day line could be critical support for this ETF.

Copper miners were far superior to their precious brethren as both the Global X Copper Miners ETF (NYSE: COPX) and the iShares Chile Investable Market Index Fund (NYSE: ECH) were both higher by 0.8%.