Silver 1 OZ 999 NY (XAG=X) fresh appetite for the perceived safety of precious metals
Silver prices on Wednesday surged by the most in nearly three years and gold settled sharply above an important psychological level at $1,500, amid a round of easy-money policies that helped to stoke fresh appetite for the perceived safety of precious metals.
The 10-year U.S. Treasury note’s TMUBMUSD10Y, -2.11% fall to new lows not seen since 2016 below 1.7%, also helped to drive demand for bullion.
September silver SIU19, +0.08% surged 75.1 cents, or nearly 4.6%, to end at $17.196 an ounce, after gaining or 0.3% on Tuesday, breaching its own psychologically important level above $17. That marks silver’s highest level since 2018, and the firmest one-day gain for gold’s sister metal one point basis since Sept. 6, 2016 and July 2016 on a percentage basis, according to FactSet data.
A recent report from Sprott Asset Management contributor Paul Wong, tracking gold and silver trading in July, notes that buying of those precious metals has spread to individual investors. “We are now just starting to see gold buying broaden out to retail, individual investor level. By all historical measures, we should see silver play a phenomenal catch-up trade to gold in the next few months,” he wrote.
He said mounting anticipation that further interest rate cuts from the rate-setting Federal Open Market Committee will follow, despite Fed Chairman Jerome Powell referring to the July 31 quarter-point rate cut as a “mid-cycle adjustment,” also has elevated gold and silver appetite.
“Any hope that this would be a “one and done” type rate hike has quickly been dashed with the latest trade war salvo,” Wong wrote.
The market is now pricing in a 35% chance (up from 15% a day ago) of a 50-basis-point cut to rates currently at a range of 2%-2.25%, and a 65% likelihood of a quarter-of-a-percentage point rate reduction at the conclusion of the Fed’s next policy meeting on Sept. 18, based on federal-funds futures, according to CME Group data.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 15.71.
The projected upper bound is: 17.52.
The projected lower bound is: 16.45.
The projected closing price is: 16.99.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 79.4014. This is not an overbought or oversold reading. The last signal was a sell 0 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 68.01. 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 1 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 157.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 buy 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.040 at 16.940. Volume was -0% below average (neutral) and Bollinger Bands were 68% wider than normal.
Open High Low Close Volume___
16.900 17.131 16.830 16.940 0
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 16.56 15.59 15.19
Volatility: 28 21 18
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 11.5% above its 200-period moving average and is in an upward 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 bullish on XAG= and have had this outlook for the last 47 periods.