This interesting year is coming to an end and in this post I would like to offer you a summary of precious metals’ dynamics in 2016.
Chart 1. Metals in 2016: Boom And Bust
Chart courtesy of tradingview.com
This year metal trading was quite exciting. The chart shows that we have gone through a full Boom and Bust cycle and the top of the cycle amazingly coincides with the middle of a year, when metals showed a maximum gain (except Palladium) within the 25-50% range. Ideal distribution within a single year! Continue reading "Precious Metals In 2016: The Dark Horse Won The Prize"→
Platinum fell in a downtrend in 2011 after the price formed a reversal double top pattern, which was confirmed on the RSI. Price rapidly reached $1400/oz, scoring $445 for the bears. The market easily overcame 23.6% and 38.2% Fibonacci retracement levels, but was stopped in four consecutive attempts by a very hard 50% level at $1345/oz. The bulls didn't jump at their chance to break upside at the $1676 level after consolidation. Later this peak became the downtrend touch point. It could be classic ascending triangle pattern, but the market turned sideways shaping a rectangle formation instead.
You can see on the chart how accurately the RSI indicator shows real and false breaks on the market. In 2013, the RSI didn't break the 40 level support twice, while price moved below $1400 support twice. And the market reversed up inside of the rectangle.
This year, the price was squeezed between downtrend resistance and 38.2% Fibonacci retracement at the $1470 level on the upside and the rectangle's support at the $1400 level on the lower side. After impulse accumulated enough power, the market first tried testing the upside, but failed and in September moved down and cracked both the $1400 level rectangle support and the 50% Fibonacci retracement level, the last one only with the 5th attempt.