Silver 1 OZ 999 NY (XAG=X) Slipping as Risk Appetite Returns
December was all roses for silver, which jumped 4.9% on the month. The upswing continued into the New Year, after a U.S. drone attack killed an Iranian general and Iran retaliated with a missile attack on U.S. bases in Iraq. Tensions rose to a fever pitch in the Middle East, as fears rose that the U.S. and Iran could go to war. Investors flocked to safe assets, and silver prices climbed close to the lofty $19.00 level.
The spike in silver prices was all-too-brief, as it became apparent that both Iran and the U.S. were interested in stepping back from the brink. Investor risk appetite quickly recovered and safe-haven silver has fallen all the way to $17.80.
Investors Eye CPI, Retail Sales
The U.S. economy started the year 2020 in solid shape, but inflation remains below the Federal Reserve target of 2.0 percent. Consumer inflation has been losing ground and the downturn is expected to continue in December. CPI is forecast to slow to 0.2%, compared to 0.3% a month earlier. On Thursday, we’ll get a look at retail sales, the primary gauge of consumer spending. Retail sales are expected to improve to 0.3%, while core retail sales are projected to rise 0.5%. Any unexpected readings could affect risk apprehension and have an impact on silver prices.
Silver Technical Analysis
With the downtrend continuing, the key 18.00 level has switched to a resistance line. Above, there is resistance at 18.60, which is protecting the 19.00 line. On the downside, there is weak support at 17.50, where the 50-EMA line is also situated. If silver breaks through this line, the metal has room to fall as low as 17.00, which is the next support level.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 17.55.
The projected upper bound is: 18.35.
The projected lower bound is: 17.23.
The projected closing price is: 17.79.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white 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 19.9369. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 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 53.15. 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 4 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 -98. This is not a topping or bottoming area. The last signal was a sell 3 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 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.169 at 17.794. Volume was 8,900% above average (trending) and Bollinger Bands were 7% wider than normal.
Open High Low Close Volume___
17.964 17.968 17.640 17.794 33,000
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 18.02 17.29 16.52
Volatility: 19 21 24
Volume: 3,300 660 165
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 7.7% 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 out of XAG= (bearish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 17 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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