Commodities Brief: Metals have roller-coaster of a day as buyers defend previous lows

FXstreet.com (Barcelona) - It was an extremely volatile day for the precious metals markets, initially trading sharply lower as trading began during the Asia session, before aggressive buyers stepped in which led to a massive reversal throughout both the European and US Sessions and concluded with a positive close.

As the Asia session got under way yesterday, silver initially experienced what looked like 'panic' selling, trading as low as 20.25 (-9%) before rebounding sharply and closing up 2.6% at 22.84. Gold traded as low as 1336, before finding support at previous lows made back in mid April and closing up 2.2% at 1391. On a final note, it should also be pointed out that the recent strength in oil is no doubt impressive, with the commodity closing up another 0.64% at 96.87. This is the fourth straight day of gains, and oil is now sitting just below a very important resistance trend line located around 97.40 (note the high of the day was 97.35).

From a technical perspective, the reversal candles which were formed today on the gold and silver daily charts are impressive and could help lead to further gains in coming sessions. However, it should be noted the trending indicators (short term moving averages, ADX) still remain in bearish set up which will need to change in order to turn the trend from bearish to neutral. Initial resistance in gold now sits at 1417 (the 9dma), followed by 1439 (the 20dma). First support sits at 1378 (the 9dma on 1 hour chart), followed by 1367 (the 50dma on 1 hour chart). Furthermore, initial resistance in silver is now at 23.18 (the 9 dma), followed by 23.57 (the 20dma). First support sits at 22.48 (the 9dma on 1 hour chart), followed by 22.15(the 50dma on 1 hour chart).