Good day. It's Francis Hunt, the Market Sniper for Cantos Charts.

Going to take a look at commodities. Also I throw in a little counterpoint to the deflationary argument that many people are putting out at the moment, so stay with me.

A year ago we spoke about gold and I suggested that we were going to have a substantial move. There was primary amplitude on this weekly chart was suggesting a $350 move from the key levels that we were at at the time, so it led me to predict that we would get to $1,300, $1,295 when we were sitting at $962. That was over a year ago.

Now following on from the theme of this week which is stall points and key levels of significance, once again you can see the chart. We've met that target of $1,295, $1,300. Now not necessarily to the very dollar, but I would anticipate that we are going to start to see a lack of further upside progress, so possibly a further spike up before a pullback and congestion on precious metals. As you know, I've been long run bullish on precious metals and remain so, but we've had two patterns now with the amplitudes are giving us a confluence on the targets. So if you saw our EUR/USD clip two days ago you would have seen that after that we tended to have a decay in the price behaviour for that underlying.

Incidentally, within that trade that I mentioned, there was a pattern within a pattern. You might notice the orange funnel which was in the much larger blue funnel when the original breakout occurred which saw us get long at $962 and have a very tight stop at $944. $944 was never seen again.

So on your money management, had you taken the big pattern you would have gone long at $990 and had a stop at $947, you would have had a risk/reward of 1:3.65 over the course of the year.

Had you taken the smaller orange pattern and got in, you would have gone in sooner at $962 and had a much tighter stop at $944.55 given the tightness we were able to get on that. For the same loss of say £2,500 you would have a 1:18.98, virtually a 1:19 trade over the course of the year. In percentage terms, if you like making money, 1,800% to 1,900% for your trade there, which is fabulous.

On the point of gold potentially stalling and at a stall point, I've also got the USD Index. Clearly, it's very key what goes on in the dollar in terms of that. On the period of dollar strength, we actually have a Hunt volatility funnel which provided us with a target. We got out at that level. Note in the box area how it just ceased to make any progress and congested and even pulled back quite an extended way. Note the timeframe for which it congested before it once again resumed its upside, so the targets of key, key levels.

I retain the funnel in there because it's a significant level. What happens? Well you may meet them on the way down again and that's exactly what has happened. We've had an inverted Hunt volatility funnel. There it is. Looking for a breakout to the downside. The target from that axis down puts me straight onto the axis of the previous key levels. Isn't that interesting?

What do we make from that? That when we reach that level, there may be a period of stall. In other words, the downside progress of the dollar may be temporarily abated and there could be a pullback up to some degree, but there could be congestion. Whether it will be as long as this period, we don't know, but it's possible to expect some support for that.

When you combine that with the targets being hit on gold, this may be a case for not being one to rush into the market right now on the long gold trade. It might be a bit crowded.

Finally is a final chart of interest for everybody. This is production days. In other words, how many production days have already been sold forward in the market for a variety of commodities and there is bullion. Now there is a number of bullion banks. Eight very big ones and there is four really prominent ones. They're in the red. The primary eight are in green. Note how many production days have already been forward sold. With a lot of the miners no longer hedging, who is selling all these paper contracts that have to be met? In other words, we need the better part of 170, 180 days of gold production just to meet what's already been sold in the market. So those that like a good conspiracy theory on market manipulation, here's some evidence for you to consider and ponder.