The markets are testing some of the most important support zones on the charts.
Gold is once again locked in a battle around the psychologically critical 4,500 level, while silver and platinum are struggling to reclaim lost ground after failing to close their bearish gaps. At the same time, the U.S. dollar remains technically strong despite a short-term pullback, which continues to add pressure to the metals complex. Today’s closing prices could be pivotal, as they will show whether buyers are ready to launch a meaningful counterattack or whether sellers are preparing for another leg lower.
U.S. Dollar Index (DX.F)
From today’s perspective, not much has changed. Even though the dollar pulled back yesterday, all of the key support levels we highlighted in the previous Lab are still intact. In other words, the technical structure remains largely unchanged, and yesterday’s commentary is still very much up to date.
Platinum (PL.F)
Platinum is telling a very similar story to gold and silver.
Once again, the bulls were unable to close yesterday’s bearish gap, and that failure exposed their weakness. The bears wasted little time taking advantage of it, pushing the price back below the black support line.
From a technical standpoint, that suggests further deterioration may be just around the corner, with the 1,800 area emerging as the next important support zone to watch.
Palladium (PA.F)
Let’s start this section with a quote from May 8:
“(…) bulls (…) need to show real determination here - especially to defend their current key ally: the bullish gap from May 5 between 1481 and 1494).
Because if that gap gets closed, the market will most likely move very quickly toward a test of the lower boundary of the orange consolidation.
And what if bulls fail there too?
Then traders should be prepared for a move toward 1425 - or potentially even 1387 over the coming sessions. (…)”
Looking at the chart today, we can see that the market unfolded exactly in line with our bearish scenario, and sellers reached our downside target (congratulations to everyone who trusted the setup and locked in profits along the way!).
So, what could happen next?
With today’s decline, palladium has dropped into the green support zone between 1,357 and 1,375. This area represents the bulls’ last meaningful line of defense before the market turns its attention to the March low.
That makes today’s closing price especially important. If buyers step in here, we could see at least an attempt at a counterattack, but if this support zone fails, the road toward 1,315 may open surprisingly quickly.
Trading Lesson of the Day
When price reaches major support, the most important question is not whether the market “should” bounce, but whether buyers actually show up.
Related: Markets Are Closing in on a Major Breakout Decision