Coronavirus fears continue to overshadow the economic future.
This together with the past and expected dilution of the US dollar (through stimulus packages) has lifted the precious metals prices. All three, gold, silver and palladium have had significant gains over the last few weeks.
Gold has even moved to new all-time-highs as markets keep their focus on what the US lawmakers ponder new stimulus measures. According to Reuters, they are currently struggling to come to an agreement regarding the new measures and the White House Chief of Staff Mark Meadows sees the approval of new measures unlikely. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we don’t provide investment advice.
Financial media talks mainly about gold when they refer to precious metals complex. They are excited as gold is inching closer to $2000 mark and has made new highs for the first time since 2011.
The yellow metal has its attraction, especially as it’s hitting all-time highs – for the newspaper reporters that is. We as traders are interested in making money, not headlines and in trading volatility equals opportunity. As the above chart highlights it’s silver – not gold – that’s making the biggest moves and has the highest volatility (fluctuation range). Since the beginning of July silver has gained over 30% while gold and palladium returns have been less than 10% for the same period.
What’s even more exciting is that the recent volatility (since July 23rd) has been approximately 23%. This is remarkable when compared to the 8% volatility in gold. Traders wishing to learn the right skills to improve their swing trading and day trading skills to take advantage of such moves are warmly welcomed to join our VIP training program. Start by registering an account and depositing here.
We will help you to learn vital skills for trading both trending and ranging markets.
For a number of years, silver prices moved effectively sideways in a range between $14 – $19. While this provided great opportunities to range traders and consisted of many mini-trends large volatile moves were missing. However, it was the new Coronavirus that changed all this.
The silver market started dropping on March 9th 2020 and after hitting a low of $11.64 started rallying strongly. The move from March low to the latest high of $26.20 has been over 130% – a massive win for the bulls that rode the whole move. The price of silver is now right below this historically important resistance level $20.20 that supported prices on several occasions from January 2011 to June 2012. The bulls also have $25 resistance from Agust 2013 to conquer.
These two levels test their commitment and should they succeed in penetrating them the next significant monthly resistance level can be found at $30.22 where a Fibonacci cluster can be identified. Should the bears gain the upper hand and bring enough supply to the market to force the price lower the next supports to focus on can be found at $21.13 and $19.65.
Key weekly levels in XAGUSD:
- $25.11 to $26.10 (Resistance zone created by two historically important price levels and a 38.2% Fibonacci retracement level)
- $19.65 (Former resistance level from July 2016)
- $21.13 (Former resistance level from September 2019)
For a more detailed analysis on XAGUSD and for actionable trading strategies ideas, please join our VIP program at www.tiomarkets.com. We want you to be able to exploit trading opportunities in silver, gold & palladium with 0 commission and tight spreads. Take advantage of the best trading account in the industry: TIOmarkets VIP Black. For more details on this truly exceptional offering see here.
TIOmarkets offers exclusively a consultancy-free service. The views expressed in this blog are our opinions only and are made available purely for educational and marketing purposes and does NOT constitute advice or investment recommendation (and should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product.
TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions.
The analysis and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits the duplication or publication without explicit approval. FX and CFDs are leveraged products. They are not suitable for every investor, as they carry a high risk of losing your capital.
CFD s are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never deposit more than you are prepared to lose. Professional client’s losses can exceed their deposit. Please see our risk warning policy and seek independent professional advice if you do not fully understand.
Please ensure you fully understand the risks involved.