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Pure gold artifact shaped as Japan's Mount Fuji by Japanese jewellery maker Ginza Tanaka is displayed in Tokyo. REUTERS/Yuriko Nakao
REUTERS TECHNICAL ANALYSIS Q2 OUTLOOK 2012 - WANG TAO
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. No information in this analysisshould be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for busi-ness, financial or legal advice regarding the products mentioned in the analyses. **
Commodities are expected to see mixed fortunes in the second quarter of 2012. While energy prices are poised to climb higher,precious and base metals may see declines. Agriculture products are expected to trade neutral, except soybean, which may testa 2008 high. The U.S. dollar, which still looks bullish, may not affect all commodities.
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SPOT GOLD SEEN AT $1,392 IN THREE MONTHS
Spot gold is expected to drop to $1,392 per ounce over thenext three months as a fall from the Sept. 6, 2011 high hasnot completed.The drop from $1,920.30 could be deep and take longerthan the previous wave IV correction from the Oct. 2007high of $1,030.80, as this drop follows the completion of anextended wave V.Another consideration is that the drop will develop threebig waves labeled A-B-C. The unfolding wave C is capableof driving the metal down to $1,392, the 100 percent Fibo-nacci projection level, which is slightly lower than $1,447,the 38.2 percent Fibonacci retracement on the rise from$680.80 to $1,920.30.Strategically, the target will be confirmed only when goldfalls below the March 22 low of $1,627.68, as a reboundfrom this level has signaled support at $1,638, the 38.2percent projection level is still valid.Resistance is at $1,790.30, the Feb. 29 high, a rise abovewhich will confirm the resumption of the preceding long-term uptrend towards $2,055.
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SPOT SILVER TO FALL TO $22.96 IN THREE MONTHS
Spot silver is expected to fall to $22.96 per ounce over thenext three months, driven by a wave C.This wave C is the second downward leg of a three-wavecycle that developed from the May, 1, 2011 high of $49.51,following the completion of the wave B, which has adopteda flat wave mode and stopped around the upper channelline of a falling channel.The depth of the fall from $49.51 indicates silver rides firmon a long-term downtrend, and it has little chance to goback to this record high.A Fibonacci projection of the wave C points to $22.96, the61.8 percent level, a break below which will open the waytowards a more aggressive target at $13.99, the 100 per-cent level, which is around the lower channel line.A rise above the Feb. 29 high of $37.46 will confirm a dou-ble-bottom, which points to a bullish target at $45.50.
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