Gold/Silver, the Missing Piece
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 2428.9, up 8.2
Silver, yesterday’s close: Settled at 30.936, down 0.226
In recent days, Gold futures have shown significantly more buoyancy than Silver. In fact, Gold reached a high of 2448.5 this morning, shortly before stronger than expected Retail Sales data batted it back. This is about 1% from Gold’s record high of 2477, whereas Silver has struggled below $32 and more than a dollar (about 3%) from its 33.05 peak on May 21st, not to mention a level nearly 50% from Silver’s record high. The Gold/Silver ratio broke a critical area of support in the first half of May as Silver showed significant strength into $33 and since bottoming on May 29th it has consolidated (because Silver is the denominator, a lower ratio shows Silver outperforming). Over the last three sessions, Gold has diverged, and this brings the ratio near the upper-end of its range over the last two months and will prove to be a critical time for the precious metals. We are currently in a seasonally supportive time for metals and economic data has broadly trended softer, which has been supportive to the narrative Fed cuts and thus a tailwind to metals. In fact, the CME Group FedWatch Tool has shown nearly a 60% probability the Fed cuts three time this year. However, a failure of Silver to participate will certainly make it a difficult environment for metals to perform.
Bias: Neutral/Bullish
Resistance: 2445-2449.1***, 2455***, 2461.7***, 2471.3-2477****
Pivot: 2433
Support: 2428.9-2430.4***, 2415.7-2419.1***, 2406.1**, 2396.1-2401.5***
Silver (Sept)
Resistance: 31.23-31.28**, 31.45-31.53***, 31.69-31.80***, 31.98**
Pivot: 31.00
Support: 30.62-30.84***, 30.45-30.54***, 30.34**, 30.00-30.17****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Gold, yesterday’s close: Settled at 2428.9, up 8.2
Silver, yesterday’s close: Settled at 30.936, down 0.226
In recent days, Gold futures have shown significantly more buoyancy than Silver. In fact, Gold reached a high of 2448.5 this morning, shortly before stronger than expected Retail Sales data batted it back. This is about 1% from Gold’s record high of 2477, whereas Silver has struggled below $32 and more than a dollar (about 3%) from its 33.05 peak on May 21st, not to mention a level nearly 50% from Silver’s record high. The Gold/Silver ratio broke a critical area of support in the first half of May as Silver showed significant strength into $33 and since bottoming on May 29th it has consolidated (because Silver is the denominator, a lower ratio shows Silver outperforming). Over the last three sessions, Gold has diverged, and this brings the ratio near the upper-end of its range over the last two months and will prove to be a critical time for the precious metals. We are currently in a seasonally supportive time for metals and economic data has broadly trended softer, which has been supportive to the narrative Fed cuts and thus a tailwind to metals. In fact, the CME Group FedWatch Tool has shown nearly a 60% probability the Fed cuts three time this year. However, a failure of Silver to participate will certainly make it a difficult environment for metals to perform.
Bias: Neutral/Bullish
Resistance: 2445-2449.1***, 2455***, 2461.7***, 2471.3-2477****
Pivot: 2433
Support: 2428.9-2430.4***, 2415.7-2419.1***, 2406.1**, 2396.1-2401.5***
Silver (Sept)
Resistance: 31.23-31.28**, 31.45-31.53***, 31.69-31.80***, 31.98**
Pivot: 31.00
Support: 30.62-30.84***, 30.45-30.54***, 30.34**, 30.00-30.17****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.