Silver has had a dazzling 2020, buoyed to multi-year highs by record amounts of cheap cash and a weak dollar. But as clouds gather on the economic horizon, investor passion for silver may be cooling and the price is now lurching towards its biggest monthly fall in nine years.
From August’s giddy 7 1/2-year high at nearly $30 an ounce, silver has lost almost a quarter of its value so far in September, set for its biggest one-month drop since September 2011, when it fell by more than 27%.
Silver has profited from this year’s rush into gold, which has touched record highs above $2,000 a ounce, as buyers sought alternatives to a weaker dollar, as well as protection against potential future shocks, whether those stem from Covid-19, geopolitics, or beyond.
But silver has a solid track record of delivering nasty shocks, particularly to the uninitiated, thanks in part to its dual personality as both a precious, and an industrial metal. It is inherently more volatile than gold and, whatever gold does, silver doubles down.
Retail and institutional investors alike appear to be giving silver the cold shoulder. Holdings of silver in exchange-traded funds have fallen by the biggest amount this month since December 2014, with an outflow of nearly 600 tonnes of metal, according to figures from Bloomberg.
Quite aside from silver’s volatility, the fourth quarter can often serve as a moment of reckoning for any asset that has been out- or underperformed.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 26.23.
The projected lower bound is: 19.81.
The projected closing price is: 23.02.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black 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 20.3184. This is not an overbought or oversold reading. The last signal was a buy 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 31.33. 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 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 -125.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 17 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 32 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.260 at 22.945. Volume was 8,900% above average (trending) and Bollinger Bands were 49% wider than normal.
Open High Low Close Volume 23.130 23.260 22.890 22.945 6,686
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 25.37 25.91 19.13 Volatility: 58 80 54 Volume: 669 134 33
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 20.0% above its 200-period moving average and is in an downward 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 bearish on XAG= and have had this outlook for the last 15 periods.