Silver gets interesting
After an uninspiring start, gold rallied yesterday afternoon and went on to hit a fresh record high above $2,680. It gave back a chunk of these gains in early trade this morning, but nothing too concerning for the bulls. This continues to be a good month for gold. It has now tacked on around $200, or 8%, from its low at the beginning of September. But it is noticeable that there hasn’t been a significant pullback so far, only the briefest, and shallowest, of consolidations just under a fortnight ago. This should keep traders on their toes, as it’s usual to see a correction of some sort or other after big market moves. The daily MACD is in ‘overbought’ territory, although that in itself isn’t an indication that there’s going to be a dramatic sell-off. But it’s likely that prices will correct at some stage. It’s then the nature of that correction which can provide clues as to what the market is likely to do next. Silver experienced another sharp spike higher yesterday which saw it climb to its highest level since December 2012. But it was unable to build on these gains and fell back as quickly as it rallied. Overall silver had a high-low range of close to a dollar, or 3%. This pick-up in volatility is a sign that, at last, silver is getting interesting.
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