Silver 1 OZ 999 NY (XAG=X) start week on front foot amid risk-on mood
Three-month base metals prices on the London Metal Exchange were stronger across the board with prices up by an average of 1.7% as at 5.55am London time. Tin led the advance with a 3% rise to $15,350 per tonne, while aluminium lagged behind with a 0.4% rise to $1,520 per tonne. Copper was up by 1.3% at $5,253.50 per tonne.
Strong price gains and good volume, with 9,373 lots traded as at 6.55am London time, bode well; volumes at a similar time of day across last week averaged 7,443 lots.
The most-traded base metals contracts on the Shanghai Futures Exchange were also up across the board with gains averaging 2.5%, also led by a 5% rise in June tin, while once again June aluminium lagged behind with a 0.8% rise. June copper was up by 2% at 42,660 yuan ($6,023) per tonne.
Spot gold prices are off by 0.4% at $1,721.26 per oz, this after strong gains on April 22 and 23 that saw gold reach a high of $1,738.75 per oz – just short of this year’s high of $1,747.25 per oz that was seen on April 14.
The more industrial precious metals are holding up well while they consolidate.
Shayne Heffernan Trade Idea
“I continue to view gold as the more attractive metal, and I believe investors would be wise to use any 12% dips in the metal to add to their positions.” Shayne Heffernan PhD in Economics
Why This Matters
Silver received support near the 20 EMA and rebounds from $15.00. The 50 EMA level at $15.60 is the first resistance level for silver. In case silver manages to settle above this level, it will likely gain additional upside momentum and head towards pre-crisis levels at $16.50.
I’d expect some minor resistance near recent highs at $15.80, but I don’t think that this level will present a major problem in case silver gets above the 50 EMA.
On the support side, the breach of the 20 EMA level will take silver to $14.60, which was the previous resistance level and has become the new support level. There was a lot of interest in this area so I’d expect a major battle between bulls and bears in case silver reaches $14.60.
Silver Bear Market Seems Ready To Turnaround
Investors big and small, domestic and foreign, have piled heartily into gold since the start of the COVID-19 bear market in stocks. Gold is one of the best performing assets classes in the first quarter of 2020, yet silver remains depressed.
Many investors wonder why.
The short answer is that 1) silver reacts more to commodity cycles than gold due to its large industrial demand and 2) investment demand has weakened since the 2011 price high.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 16.53.
The projected lower bound is: 13.66.
The projected closing price is: 15.10.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 76.7740. This is not an overbought or oversold reading. The last signal was a sell 7 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 49.80. 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 buy 24 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 -30. This is not a topping or bottoming area. The last signal was a sell 8 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 22 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.091 at 15.149. Volume was 8,900% above average (trending) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume 15.234 15.330 15.080 15.149 16,286
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 15.32 15.55 17.00 Volatility: 36 62 39 Volume: 1,629 326 81
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 10.9% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods.
There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 11 periods.
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