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Gold

In retrospect, February gold contracts spent a lot of time waffling around unchanged levels, but at times the market did return to the vicinity of the prior session's lows. Perhaps some players were simply defeated in the wake of the downward bias on the charts and perhaps others were simply discouraged because of gold's recent lack of benefit from supportive outside market action. Even scheduled U.S. data today (Wednesday) was confusing as the data might have been softer than some expectations. The bulls probably need some significant improvement in global macro economic sentiment or perhaps a serious flight to quality event to regain control as recently potential bullish developments haven't been given much attention.

Technicals

The gold contract closed at 1668. The market closing below the 40 day MA is confirmation the trend momentum remains bearish. With the market closing below the VC Weekly Price Momentum Indicator of 1670, it confirms the price momentum is bearish. Look to take some profits, if long, as we reach the 1676 and 1684 levels during the week. Buy corrections at the 1662 to 1656 levels to cover shorts and go long on a weekly reversal stop. If long use the 1656 level as a SCO/GTC (Stop Close Only and Good Till Cancelled order).

Silver

The silver market fell down in another slide that ultimately resulted in a lower low for the move. Some players suggested that the March silver contract was gunning for the 200 day moving average down at $30.995 and others simply think that physical commodities are out of favor perhaps until the U.S. fiscal cliff thing is out of the way. In short, supportive currency market action, sharp gains in energy prices and residual hope that the two sides were moving closer together was of little importance to would-be silver buyers today.

Technicals

The silver contract closed at $31.12. The market closing below the 40 MA is confirmation the trend momentum is bearish. With the market closing below the VC Weekly Price Momentum Indicator of $31.33, it confirms the price momentum is bearish. Look to take some profits, if long, as we reach the $31.65 to $32.18 levels during the week. Buy corrections at the $30.81 to $30.50 levels to cover shorts and go long on a weekly reversal stop. If long, use the $30.50 level as a SCO/GTC (Stop Close Only and Good Till Cancelled order).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

Source: Thursday's Gold And Silver Forecast