Silver 1 OZ 999 NY (XAG=X) underperforming gold due to weaker safe-haven appeal
Unfortunately for silver bulls, there is no good news in sight for the precious metal, according to Orchid Research that believes silver will continue to underperform gold due to weaker safe-haven appeal.
“At this juncture, we are not interested in asserting upside exposure to silver because we think that it will continue to underperform gold in the coming months due to its weaker safe-haven characters,” the research firm said in a Seeking Alpha post last week.
Silver has been in “a clear downtrend” since February and that is unlikely to change in the coming months, said Orchid Research.
On top of that, there is a high risk of speculative positioning in silver turning even more bearish and leading to another sell-off.
“Specs are net short Comex silver, but the net short fund position is small compared to its historical low, leaving plenty of room for aggressive speculative selling,” the firm said. “ETF investors slashed significantly their holdings last week, at the fastest pace since January 2019. Silver ETF holdings declined for the first time in six weeks.”
Also, future demand is uncertain at the moment, Orchid Research pointed out, noting that increased silver coin sales in April could be just a temporary reversal.
“After a marked decline in silver coin sales at Perth Mint in January (-22% YoY), February (-41% YoY), and March (-4% YoY), sales nearly doubled in April, narrowing the year-to-date sales decline to 7% YoY,” the firm stated.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 14.93.
The projected upper bound is: 14.71.
The projected lower bound is: 14.03.
The projected closing price is: 14.37.
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 25 white candles and 23 black candles for a net of 2 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 34.5127. This is not an overbought or oversold reading. The last signal was a buy 6 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 36.88. 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 8 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 -77. This is not a topping or bottoming area. The last signal was a buy 5 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 2 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.025 at 14.390. Volume was 8,900% above average (trending) and Bollinger Bands were 1% wider than normal.
Open High Low Close Volume___
14.400 14.400 14.390 14.390 2
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 14.46 14.89 14.90
Volatility: 14 15 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 3.4% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 64 periods.