Metals:

23May Risk-off action has the entire Metals complex down for the day; with late action taking back some of the most severe early losses.

Gold: 23May Positive U.S. Dollar action had Gold making serious lows in early action. Early AM action tested down to near the -2 STD (1530.7) below the falling 21-day moving average. The less bullish negative hammer formation in place with today’s action portends a test of resistance, likely at 1570, or 1595, if a bigger rally ensues. The 1600 level should serve as a psychological resistance area.

We also expect the falling 21-day moving average (1611.5) to offer some resistance, as well.

Support is likely at 1535 (today’s low) and then 1530, near the low from 5/16.

Last week’s bounce off our noted support level at the 26Dec low (1523.9) has taken the market off extreme Oversold conditions. This general area may serve as a double bottom (maybe a triple bottom?), as well, aligning with the previous low (26Sep 1535).

Below is a slippery slope to 1500 psychological support, then a cluster of lows between 1462.5 (02May) and 1478.3 (27June). The 38.2% retracement of the Oct 2008- Sep 2011 rally comes in at 1456.8.

Seasonal Snapshot: All three patterns see modest strength into the last half of May.

Copper: 23May Like the Gold, Copper has a less bullish negative hammer in place with today’s action.

Like Gold, Copper also tested the -2 STD below the 21 day moving average. Its bounce failed to get back to the recent low settlements, though.

Recent news of Chinese order cancellations isn’t going to offer any support to a market already under pressure.

Since the US Dollar is again stronger today, we leave Monday’s comments in place:

Copper’s fall continues to decelerate after last Monday’s plunge. The last week’s consolidation was bound by 3.4315-3.5215. Unless the U.S. Dollar stops rising and with most global economic news coming in as disappointing, Copper is likely to remain under pressure.

The July contract continues to ride the important –2 STD (3.4240) below the 21-day moving average (3.6640). This shorter-term average has fallen below the longer-term 200-day moving average (3.6705) again after flirting with it for the last month.

On more weakness, watch the double bottom from 05&09Jan around 3.3800, then the series of previous lows back to last Nov (3.3250; 3.2325; and 3.2040).

Resistance is seen at 3.6250, where a candlestick chart showed bottoming action in mid-April.

Seasonal Snapshot: All three patterns have a mild upward bias until turning decidedly weaker around 27May.