Silver 1 OZ 999 NY (XAG=X) sees big pullbacks after recent bigger gains; not surprising
Gold and silver futures prices are trading solidly lower in midday U.S. trading Wednesday, on normal downside corrections from recent strong gains that saw gold prices hit a 7.5-year high, at $1,788.80, on Tuesday, basis June Comex futures. Big gains in markets can also produce big, normal corrective pullbacks in still-strong price uptrends. Bulls in both metals are still enjoying the firm technical advantage on the charts. June gold futures were last down $28.20 an ounce at $1,740.70. May Comex silver prices were last down $0.585 at $15.545 an ounce.
Global stock markets were mixed to lower in overnight trading. U.S. stock indexes are solidly lower at midday following some very downbeat, although not unexpected, U.S. economic data released Wednesday morning. The U.S. stock indexes are also seeing downside corrections following recent good gains that have pulled them out of bear market territory (retracing over 50% of their recent declines).
Lower crude oil prices that today see Nymex crude oil prices around $19.75 a barrel and hitting an 18.5-year low overnight are helping to pressure the metals and the stock markets today. The International Energy Agency (IEA) said in a report today that no “feasible” amount of crude oil production cuts can offset the demand destruction caused by Covid-19.
It can be argued that the recent gains in stock indexes are due in part to a battered raw commodity sector, led by crude oil’s descent, that has seen investor money flow out of hard assets and back into paper assets—equities and bonds. Gold is the outlier in the beleaguered raw commodity sector.
The International Monetary Fund on Tuesday warned the Covid-19 pandemic will slow global economic growth to the slowest since the Great Depression of the 1930s. The IMF forecast -6.6% economic contraction for advanced economies. The IMF forecast GDP growth returning to 5.8% in 2021. The agency estimates global the Covid-19 pandemic will peak in the second quarter and fade away in the second half of 2020. However, if the pandemic continues through the third quarter then such could knock another 3% off global economic growth. A second coronavirus outbreak in 2021 could lop another 5% off the global GDP growth for 2021.
The U.S. dollar index is higher this morning on a corrective rebound from recent selling pressure. The 10-year U.S. Treasury note yield is trading around 0.73% this morning.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 16.72.
The projected lower bound is: 13.91.
The projected closing price is: 15.31.
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 26 white candles and 24 black candles for a net of 2 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 68.7808. 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 53.04. 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 17 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 64. This is not a topping or bottoming area. The last signal was a sell 1 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 15 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.114 at 15.361. Volume was 8,900% above average (trending) and Bollinger Bands were 22% wider than normal.
Open High Low Close Volume___
15.462 15.462 15.260 15.361 8,095
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 15.23 15.89 17.02
Volatility: 35 61 38
Volume: 810 162 40
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 9.7% 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 4 periods.
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