Jittery Investors Flock to Gold, Silver 1 OZ 999 NY (XAG=X)
Silver has posted small gains on Friday. Currently, silver is trading at $17.54, up $0.65 or 0.65% the day.
Jittery Investors Flock to Gold, Silver
Silver prices have rebounded this week, with gains of 5.22%. After last’s week disaster, when silver fell almost 10%, the metal received a much-needed boost from the Federal Reserve, which shocked the markets with a large cut of 0.50% earlier this week. The emergency cut was unexpected, as the last time the Fed made a rate cut between policy meetings was in 2008, during the financial crisis. Fed policymakers can be credited with taking decisive action at a time when the coronavirus is causing economic mayhem and threatening to cause a global recession. The Fed is counting on the sharp rate cut to boost the U.S. economy, with fears that the virus could spread rapidly in the U.S., as it has done in countries in Europe and Asia.
The Fed rate cut has put pressure on other central banks to lower rates, and Australia’s central bank immediately responded with a cut of 25 basis points. Lower interest rates make the U.S. dollar less attractive, which is bullish for precious metals. Silver may benefit from a looser monetary policy, but due to its industrial component, the flow towards precious metals in this time of crisis is likely to benefit gold more than silver.
Silver Technical Analysis
17.50 is under strong pressure in resistance. and was tested in the Asian session and European sessions. The round number of 18.00 is the next resistance line, followed by 18.75.
On the downside, the 50-day EMA is close by at 17.44, with the 200-day EMA following at 17.10. If the 200-day EMA crosses above the 50-day EMA, it would be a bearish signal for silver prices. Below, we find support at 16.90.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 17.63.
The projected upper bound is: 18.10.
The projected lower bound is: 16.51.
The projected closing price is: 17.30.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 62.2272. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.55. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 42 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -54. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.097 at 17.313. Volume was -0% below average (neutral) and Bollinger Bands were 75% wider than normal.
Open High Low Close Volume___
17.407 17.568 17.030 17.313 0
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.47 17.81 17.08
Volatility: 45 29 27
Volume: 0 0 0
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 1.4% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 5 periods.