**Today I want to look at technical analysis of precious metals and other commodities.**

This is a weekly chart of crude oil:

The chart has been in a pennant until a few weeks ago. Now all the resistance in the chart is gone.

In this scenario prices neglect gravity and head up from here without sensing any downward pressure.

While this scenario is not impossible, I don’t consider it likely.

I would give such a scenario a probability of 1 per cent.

In this scenario prices go down because there is no resistance left in the chart.

At this juncture this is the likely scenario.

I would give such a scenario a probability of 99 per cent.

It seems likely that we are going to fill up our cars cheaply this summer.

This is a weekly chart of gold:

The chart is in a pennant, currently on its way down, and once it breaks out of the resistance or the support, the move will be violent.

In this scenario prices head up from here and break out of the resistance that is weighing on the upside.

Its not an unlikely scenario, but I would only give it a probability of 20 per cent.

In this scenario prices go down from here. This is the more likely scenario given how prices have moved lately.

I would give such a scenario a probability of 80 per cent.

In the short-term prices are likely to continue down, but in the medium-term it looks as though they are moving up. The reason why I say this is because prices have been knocking on the upper resistance zone at least twice recently. It would surprise me if they did not succeed to go through at some point.

This is what a weekly chart of gold looks like:

Prices sit just at the descending trend line and depending upon where they move from here will determine their movement for a long time.

**The bullish scenario**

In this scenario prices are slowly edging their way through the descending trend line.

If the resistance is gone prices have no immediate thing stopping them from much higher.

In favor of this is the fact that we are above both the 50-week and the 100-week moving averages.

Given the lower high made in February, I’d still give such a scenario a probability of 40 per cent.

**The bearish scenario**

In this scenario prices are headed lower from here.

The arguments for lower prices are the same as above.

I would give such a scenario a probability of 60 per cent.

This is a weekly chart of crude oil:

**Summary:**

Prices have now come down again and are now pushing against the ascending trend in the Figure 1.

**The bearish scenario:**

I will begin with the bearish scenario. This is where prices fall down through the ascending trend line and then continue down. At this point I would give such a scenario a probability of 65 per cent.

**The bearish/bullish scenario:**

In this scenario prices first go down but then rebound once they hit the trend line below. This is not implausible and I give such a scenario a probability of 30 per cent.

**The bullish scenario**

This is where prices shoot straight up from here. Given recent trends I don’t consider it very likely and I would give it a probability of 5 per cent.

This is what a weekly chart of gold looks like:

What we are seeing is that prices are coming up towards the descending trend line.

In this scenario prices are going through the declining trend line and then continue up beyond.

Given that the 100-week moving average is slightly ascending, I would give such a scenario a probability of 70 per cent.

** **

**The bearish scenario**

In this scenario prices are going down from here.

While a distinct possibility, I only give such a scenario a probability of 30 per cent.

This is what a weekly gold chart looks like:

Prices are now coming up against the declining trend line and in the bullish scenario they go through the trend line and continue up afterwards.

Because of the rising 100-week moving average I do consider this a probable scenario that I would give a probability of 30 per cent.

In the bearish scenario prices go up to the declining trend line, but then they stumble and fall.

Given the lower high in February and the potential of a head and shoulders-pattern in the chart (Figure 2), I give this a higher probability of 70 per cent.

If the Head and shoulders-scenario plays out, then we are potentially looking at prices around $1,080.

This is a weekly chart of crude oil:

Prices are now just between the descending and the ascending trend lines.

Where they go from here is not clear, but I would give it a slightly higher probability of going lower rather than higher (60:40).

This is weekly chart of the HUI:

Prices are stuck between the 100-week and the 50-week moving average.

Chances are about 50:50 that they go up or down.

In the bullish scenario prices are lifted by the 100-week moving average and go higher through the descending trend line.

I would give such a scenario a probability of 40 per cent.

In the bearish scenario prices are being pressed down by the declining 50-week moving average.

Given the lower high in February I would give such a scenario a probability of 60 per cent.

This is a weekly chart of platinum:

In the bullish scenario prices are going through both the 100-week and the 50-week moving average.

Because I don’t think that this is likely I give it a low probability of 20 per cent.

In this scenario prices are being pushed down by the descending 100-week moving average and then they are being pushed down through the vertical trend line.

I give this a probability of 30 per cent.

This resembles the one above with the only difference that prices are bouncing off the vertical (or slightly ascending) trend line.

I give this a probability of 50 per cent.

This is a weekly silver chart:

The chart is stuck between the ascending and the descending trend lines.

Where it will go from here is anybody’s guess.

It can go up and it can go down. Nobody knows for sure.

This is what a weekly chart of gold looks like:

What we see in the chart is that we are now pushing up against the 50-week moving average.

Prices seem to be getting squeezed between the 100-week and 50-week moving average.

In this scenario prices go through the 50-week moving average and continue up through the descending trend line.

Because of the lower high in February I give such a scenario a low probability of 20 per cent.

In this scenario prices are first going up until they reach the descending trend line and after that they go down.

I give this a slightly higher probability than the one above: 40 per cent.

In the bearish scenario prices are simply falling down from where they currently are.

Given the current nature of the chart I give such a scenario a low probability of 10 per cent.

In this scenario prices are first going down and then rebounding at the ascending trend line.

If we ignore the reasons why the chart would fall in the first place, I would give such a scenario a probability of 30 per cent.

This is weekly chart of Randgold:

In the bullish scenario prices are being pushed up by the ascending 100-week moving average.

Because prices are now above the 50-week moving average it is not at all implausible.

I would give such a scenario a probability of 0 per cent.

In this scenario prices are being pushed down by the declining 50-week moving average.

I would give such a scenario a probability of 30 per cent.

(note: the company was formerly known as *Silver Wheaton*.)

This is a weekly chart of Wheaton Precious Metals Corp:

In this scenario prices are following the ascending trend line upwards.

In favor of this is the rising 100-week moving average, but that’s about it.

I would give such a scenario a low probability of 20 per cent.

There is possibly a head and shoulders pattern forming in the chart.

What this means is that the downside of the chart is the ten points that the “head” is higher than the right “shoulder”.

This means that prices may drop all the way back to ten.

I would give such a scenario a probability of 80 per cent.

This is a weekly chart of crude oil:

It is obvious from the chart that we have two opposing trends working.

Eventually one of them will win, but I do not know which.

I would however put a slightly higher probability on a bearish scenario, but it would not surprise me if the outcome instead was bullish.

This is a chart of the gold bugs index:

In this scenario prices go up and through the declining 50-week moving average.

Given the nature of the chart I give this scenario a low probability of 20 per cent.

In this scenario prices are going down and continue through the ascending trend line.

Given the lower high achieved in February I give this scenario a probability of 30 per cent.

In this scenario prices first go down and then bounce up once they have hit the ascending trend line.

I give this scenario a probability of 50 per cent.

This is a weekly chart of gold:

In the bullish scenario prices obviously go up from here. They not only go up but through the 50-week moving average as well as the descending trend line.

Given the downward pressure exerted by the upper trend line I give such a scenario a low probability of 20 per cent.

In this scenario prices are going down through the 100-week moving average and continue down.

Given the lower high in February I give this scenario a high probability: 80 per cent.

This is a weekly chart of IAMGOLD:

It looks as thogh prices are being lifted by the ascending trend line and that they are continuing up at least until the descending trend line.

I would currently give such a scenario a high probability of 70 per cent.

Of course I can also argue for a bearish outcome where prices tumble from here.

In favor of this argument is the lower high that we reached in February.

I would give such a scenario a probability of 30 per cent.

This is a weekly chart of Yamana:

The chart looks heavy and I prefer to write about the bearish interpretation first.

We are beginning to see a head and shoulders pattern develop in the chart.

Where that will lead us is difficult to say for sure, but the text book reading of the Head and shoulders is the following:

The High point in the head = $6

High point of right shoulder = $3.60

Difference: $6 – $3.60 = $2.40

High point of right shoulder – Difference: $3.60 – $2.40 = $1.20

What this means is that we could potentially be seeing a drop all the way down to the $1.20 level.

I don’t think it will go as low, but the potential is there.

I would give such a scenario a probability of 95 per cent.

Of course it’s always possible that I’m wrong and that prices will bounce up from here.

Given the looks of the chart I only give it a probability of 5 per cent.

This is a weekly chart of crude:

Depending on how we draw the ascending trend line the position of the chart is different obviously.

I would still state that we are below the ascending trend line and that the only thing keeping crude oil afloat is the descending 100-week moving average.

It does not look good for higher crude prices.

I give a bearish scenario a probability of 95 per cent.

This is a weekly chart of the HUI:

In the bullish scenario prices are continuing up in their current direction – up from the 100-week moving average.

They will then penetrate the 50-week moving average and the descending trend line.

I would give such a scenario a relatively low probability of 10 per cent.

This scenario is equivalent to the bullish scenario with the exception that prices are getting pushed down by either the 50-week moving average or the descending trend line.

I would give such a scenario a higher probability of 60 per cent.

In this scenario prices are collapsing down through the combined ascending trend line/100-week moving average.

Such a scenario has a probability of 40 per cent in my book.

This is a weekly chart of platinum:

In this scenario prices are bouncing up from the lateral trend line that is supporting prices.

Given the lower high in February I give this scenario a low probability: 5 per cent.

In the this scenario prices are falling through the lateral trend line.

Given where prices are (underneath both moving averages), I give such a scenario a higher probability of 95 per cent.

This is a weekly chart of gold:

In the bullish scenario prices are lifted by the 100-week moving average and go through the descending trend line.

Given the ascending nature of the moving average I would give such a scenario a probability of 30 per cent.

In the bearish scenario prices going through the 100-week moving average down to the ascending trend line.

Given the lower high a few weeks ago together with the size of the descent last week I would give such a scenario a probability of 70 per cent.

This is a weekly chart of Goldcorp:

In this scenario prices bounce off of the ascending trend line and go through moving averages in the chart.

Given the lower high in February I give such a scenario a low probability of 10 per cent.

In this scenario prices plunge through the ascending trend line i Figure 1.

Given the declining 100-week moving average I would give such a scenario a probability of 90 per cent.

This is a weekly chart of Newmont Mining (NEM):

What we have in the chart is that prices are pushing down against an ascending trend line.

Furthermore, prices are stuck between two equally rising moving averages.

In the bullish scenario prices are staying above the rising trend line and then bounce of.

Because of the rising trend line I would give such a scenario a probability of 70 per cent.

In the bearish/bullish scenario prices are first going through the ascending trend line but then rebound when they encounter the 100-week moving average.

I would give such a scenario a probability of 20 per cent.

In the bearish scenario prices are plunging through the ascending trend line and also go through the rising 100-week moving average.

I would give such a scenario a probability of 10 per cent.

Because of the difficult nature of the chart I am scrambling to give it a clear direction.

Looking at the chart patterns for the precious metals themselves it may be that prices are going down.

However, the chart of Newmont Mining tells another story of a slightly higher probability for higher prices.

Yesterday the plug came off the crude oil market. This is what a daily chart looks like:

Even if it is unlikely we cannot completely rule out the bullish scenario from here.

Given the size of the bar yesterday I would give such a scenario a negligible probability of between 3 and 5 per cent.

With this chart pattern I have to say that it is very likely that prices will continue down. There is no support anywhere in sight.

I would give such a scenario a probability of between 95 and 97 per cent.

This is a weekly chart of The Gold Bugs Index (HUI):

Because prices are sitting just at the ascending trend line there is a possibility that they will rebound from here.plunge through

Because of the lower highs made in February and about a month ago, I don’t think that this is a plausible scenario.

I would give it a probability of 15 per cent.

In this scenario prices plunge through the combined ascending trend line and 100-week moving average.

Because of the lower highs (described above) I give such a scenario a probability of 85 per cent.

This is a weekly chart of the world platinum index (XPLT.X):

In the bullish scenario prices rebound from the ascending trend line where they sit right now.

Because prices are below the 50- and the 100-week moving averages I give such a scenario a low probability of 15 per cent.

In this scenario prices are going through the ascending trend line and continue down.

Because of the lower high in February compared to last fall I would give such a scenario a probability of 85 per cent.

The chart sits just at the 100-week moving average and it is likely to rebound off the moving average.

I would give such a scenario a probability of 60 per cent.

There is no guarantee for us to rebound off of the 100-week moving average.

It is indeed likely that we will continue down from here.

In favor of this argument there is the lower high made three weeks ago compared to the one made last autumn.

I would give such a scenario a probability of 40 per cent.

This is a weekly gold chart:

This is an interesting chart pattern where prices are sitting just at the 50-week moving average.

Depending on where will go from here the chart will find its resolution.

In the bullish scenario prices rebound from the 50-week moving average and continue up through the descending trend line.

Because of the lower high last week compared to last fall I would give such a scenario a probability of only 30 percent.

In the bearish scenario prices go through both the 50-week and the 100-week moving averages.

In analogy with the lower high above I would give such a scenario a probability of 70 percent.

This is a weekly chart of Agnico-Eagle:

The chart sits just at the descending trend line/50-week moving average.

First of all I will argue for the bullish case.

In this scenario prices continue up through the 50-week and the descending trend line.

Because the 50-week moving average is ascending I would give such a scenario a probability of 60 percent.

In this scenario prices are pushed down by the flattening 50-week moving average.

They then also go through the 100-week moving average.

I would give such a scenario a probability of 40 percent.

This is a weekly chart of Kinross:

What is happening in the chart is that it is getting squeezed between trend lines that are working in opposite direction.

We are very soon going to see a resolution as to where the trend is going, but we don’t know yet.

Because technical analysis is all about interpreting the charts, and no additional knowledge can be drawn from politics, I prefer to stick to what the charts are telling me.

The way to go forward is to distinguish between two possible scenarios: the bullish and the bearish.

In the bullish scenario prices are lifted by the 100-week moving average and continue through the 50-week.

Because of the looks of the chart I would only give such a scenario a probability of 20 percent.

In the bearish case prices are going through the ascending trend line as well as the 100-week moving average.

Looking at the chart the feeling that I get is that this is the more probable scenario.

I would therefore give it a probability of 80 percent.