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Gold Trends Near Resistance After Consecutive Session GainsCurrently, gold is budding up against intraday resistance, following two consecutive sessions of gains on a weaker dollar. As the rate hike came and went, many – even those who ushered in the hike with excitement – are beginning to wonder if the Federal Reserve waited far too long to boost interest rates. The yellow metal had began its two-day rally by finding bidders on the weekly support level of $1,046. Even though gold has seen nice gains following the FOMC, the paradigm has been to sell rallies despite whether or not it fundamentally makes sense. According to the Commitment of Traders data, large speculators are the most short gold ever. This could cause for a disastrous 2016 for hedge funds if fundamentals for owning gold improve, as we have already seen what happen when crowded trades unravel in the euro. On the four-hour chart, gold is hovering just under $1,080 and the 200-4H EMA, which will act as dynamic resistance until a confirmed breakout occurs. Price action is trading at the upper-end of a symmetrical triangle, while a minor descending support within the pattern is found (dotted line). Within the pattern, support is found at $1,074 and $1,066, while a confirmed breakout could signal a move higher to $1,088 and $1,095, potentially $1,111, per ounce. If gold prices do see selling pressure and close beneath trend support, weekly support levels will remain key. $1,000 and $955 are technical targets. Please feel free to comment and share charts! And follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
FX:XAUUSD
by CommoditiesTrader
5
Precious Metals Jump Ahead of FOMCPrecious metals jump higher ahead of today’s FOMC minutes and potentially the first rate hike in the U.S. since 2007. Why? It’s most likely contributed to the fact that the majority of market participants believe Fed Chair Janet Yellen will remain extremely dovish post-rate increase. A dovish hike may be a hard sell , as Nomura suggests, but precious metals may have already priced in a specific rate trajectory. The U.S. dollar carry trade is the most crowded trade and by significant margins, according to Bank of America Merrill Lynch Survey of Global Fund Managers. If Yellen choreographs a dovish hike, the dollar trade could begin to unwind causing relief in battered commodities; and gold and silver will benefit. Gold has been trading in a range, and price action is forming a small, symmetrical triangle on the daily chart. The results of the FOMC, and surrounding rhetoric, will pave the way for the yellow metal. If there is a more hawkish tone, gold could trade lower to $1,035, while a more dovish tone may send gold to restest resistance at $1,194/97. Silver is a little tricky because it is more tied in with economic growth than monetary policy. The beaten down commodity will see relief if the dollar bulls take some off the table, but poor economic data may still be a hindered to silver. If inflation were to pick up, consider that bullish for silver. If commodities can get a boost, expect silver to trade higher to $14.52 with the potential of $15.30 (highly dependent on the outcome of the dollar). Conversely, selling pressure could cause silver to test significant support levels at $13.12. Please follow me @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
COMEX:GC1!
by CommoditiesTrader
1
Gold Remains Vulnerable $1,000 per ounce is near - an existential victory for Wall Street Historically, gold has been a go-to for times of financial uncertainty, whether deflationary or inflationary. Unfortunately, with the perception that central banks around the world will stimulate until growth shows up (hasn't so far) and a global slowdown won't turn into a global recession, gold will bare the brunt of hostility. Gold has closed lower the last 14 of 15 days, and the yellow metal is currently trading lower ahead of today's FOMC minutes. Traders will parse through rhetoric and formulate their own interpretation on whether the Fed will hike interest rates into a stronger dollar. As expected (no, really!), gold is trading a hair above $1,066 - a target posted in "Gold Lower as Traders Eye ECB Minutes." Gold is so vulnerable to market perception that the common trope of gold to $1,000 is strikingly more likely, even as U.S. data continues to flash signs of a significant economic downturn. If gold trends to a minor support target of $1,041, the weekly support of $1,035 is clearly the only thing between now and $1,000 per ounce. The dollar index has increased 23 percent since 2014, which still remains slightly lower than the 13-year high made earler this year. If the Fed exacerbates the strong dollar by hiking, the effects to the economy will be more pronounce. To note, Fed Vice Chair Stanley Fischer said during his speech last week that the effects of the strong dollar are lagging. For instance, a prolonged 10 percent appreciate in the dollar would take a large toll on real exports. And that has already taken shape. "Real exports fall about three percent after a year and more than seven percent after three years. The gradual response of exports reflects that it takes some time for households and firms in foreign countries to substitute away from the now more expensive U.S.-made goods," said Fischer. You don't say? He continues to outline how bad a strong dollar really is, "the staff's model indicates that the direct effect on GDP through net exports is large, with GDP falling over 1 to 1.5 percent below baseline after three years." So, in essence, Wall Street may get to rejoice soon enough on their crusade to $1,000 or below, but does that really matter when the economy is eroding and the strong dollar adds insult to injury?
COMEX:GC1!
by CommoditiesTrader
3
The Missing Key for Silver is InflationShould silver price in retail demand or economic sentiment? Silver prices have rallied hard since the beginning of October, up almost 10.5 percent since the October 2 low. However, traders are now budded up against key technical resistance. Will traders’ sentiment reject silver’s upward momentum, as it has done seven times since 2013, or will demand spark higher gains? Silver has had a rough go since crashing from its 2011-highs. Currently, silver is trading around the 200-day EMA, which has proven fickle for silver prices. Every time prices have been able to rally to the key pivot-point, prices have been immediately rejected or the trend’s momentum quickly faded. Despite mints beginning to ration silver bullion coins (again), prices are continuing to show the divide between sentiment and demand. As I have mentioned in several articles previous, silver’s demand is largely based upon economical factors, such as manufacturing and industrial output whereas gold prices are almost entirely derived from investment demand in relation of central bank policy. Some analysts expect silver prices to rally because demand for minted coins has risen, and mints are having a tough time filling orders. But, if history is any indicator, this does not happen. For instance, in July, the U.S. Mint reported that demand for American silver eagles were so high that it depleted their stores and began to ration the bullion coins. Needless to say, silver went on to drop an additional $2 per ounce while breaking $14 per ounce back in August. It may not be all it is cracked up to be. The shortage of minted coins only represents one, small facet of silver demand. According to Smaulgld.com, when the first shortage was reported, the shortage was found in the retail market but not the wholesale market. Silver has long been a trusted go-to for retail investors. It is a tangible asset that tends to be priced reasonably for the everyday investor. The multi-year lows carved out this year has only been seen as a buying opportunity. Although, it is important to understand that silver is not an investment for tough economic times because that is, generally, how market participants price silver. Silver is only a form of protection against inflation, which undoubtedly will show up. Investors will just have to be incredibly patient. (Silver outperformed during recessions that were coupled with higher inflation as seen during the 1940s and 1970s recessions). Unlike gold, silver has no historic evidence of protecting against deflation (gold nearly tripled during the early-1930s). During significant bouts of deflation in the early-1920s, and again in 1929 to 1933, silver’s performance was horrible. It was also horrible as inflation subsided after the stagflation of the 1970s and early-1980s. Again, following the lack of inflation – on paper – during the Federal Reserve’s seemingly endless quantitative easing programs after the financial crisis. Current rates of inflation, as measured by consumer price index (CPI) and producer price index (PPI), could suggest prices have more to fall. The U.S. is seeing the lowest bouts of inflation in decades. The U.S. is experiencing the lowest levels of CPI outside of a recession since 1954 and the lowest PPI since 2001, following the dotcom bubble. However, silver has experienced great gains following a recession as inflation re-enters markets. Silver could get cheaper, but patience is a virtue and could reward big when inflation rears its ugly head. Please check out the original link for additional charts and graphs: bullion.directory Please follow me on Twitter @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
FX_IDC:XAGUSD
by CommoditiesTrader
5
Silver at an important crossroadI just wrote about the gold/silver ratio and how it's suggesting a possible new cycle in the silver market (see suggested idea below). To further develop this hypothesis, I find that silver prices are at an important crossroad following last week's rally. The US dollar's sharp fall following the week September US employment data has given relief to battered commodities and commodity-dependent currencies (EM + Aussie + Loonie + NOK). Some are already saying that these assets are changing course, but I prefer to hold of a bit in order to confirm that a durable change in direction is in place this quarter. This is why I'm watching silver closely. The second bounce off of $14 smells like a double bottom, but I've seen such configurations be invalidated once prices hit their first resistance. With silver prices currently under a 24-month trend line (around $16.00-16.50), I would like to see a technical break before the end of the month (with more US dollar weakness) to be more convinced of the bullish prospects for this metal. Note that the RSI is also testing a long-term trendline. A break of this resistance would theoretically suggest that bullish momentum is building in the market, thereby supporting a technical break above $16. If this were to happen with a clear breakout above $16.50 (or even better $17), I would expect prices to rise back up to $19 by the end of the year. The conditions for a technical signal are thus set out, but we should all know that silver may very well start falling again so long as prices are below $16 this week. Nonetheless, there's still a decent support at $14 on which I will continue focusing in the weeks ahead.
COMEX:SI1!Long
by ABRAK75
Silver might be at the start of a new cycleThe Gold/Silver ratio is currently suggesting that silver might outperform gold if commodities continue to rise. I'm basing this mostly on the recent price action in the GC1!/SI1! ratio as signs of fatigue have appeared just below a long-term channel resistance. Note that silver prices alone successfully held the 2014 lows at $14. Those who are aggressively bullish on battered commodities are likely betting on a double bottom, which remains to be seen in the weeks ahead.
COMEX:GC1!
by ABRAK75
Bitcoin: A Commodity?Bitcoin has long been a favorite for those looking for an alternative to centralized fiat money. Although I always thought bitcoin was promising, the technological aspect always held safety and liquidity concerns. Due to the fact that it is hard to prove peer-to-peer transactions, financial institutions - especially in the U.S. - have strict policies and layers of purchase authenticity that make buyers wait from a few hours or longer to actually receive the bitcoin. Could the inception of other bitcoin trading products add to liquidity or the general acceptance of bitcoin? Recently, the Commodity Futures Trading Commission (CFTC) has designated that bitcoin is a commodity. By doing so, adding bitcoin derivatives is an attempt to regulate the bitcoin market. Some find it strange that the CFTC has said that bitcoin, among other digital currencies, has the same properties as physical commodities like gold or oil. It is true that there is a defined supply of bitcoin, but it is more than likely that the designation is more of an attempt to regulate than to legitimize bitcoin as a true commodity. Furthermore, the addition of bitcoin derivatives could simply open up the bitcoin market to more traders. Because let's face it, on a day-to-day period, trading bitcoin can be a snooze-fest. With futures trading being as digital as bitcoin, less than five percent of futures are ever exercised for delivery which may lead to more bitcoin speculation. One thing is certain: bitcoin could an alternative to traditional safe-haven assets. For the last year, I have been the only one, that I know of, that has noticed that bitcoin has been trading the inverse of the most traditional safe-haven - gold. Bitcoin's largest movements seem to stem from money flowing in and out of gold. Unfortunately, in a crisis situation, I believe gold would win because it is tangible and that is physiologically comforting. If gold garners support from another central bank led financial crisis, bitcoin could see dark days. Please follow me on Twitter @Lemieux_26 Check my posts out at: bullion.directory www.investing.com www.teachingcurrencytrading.com oilpro.com
BITSTAMP:BTCUSD
by CommoditiesTrader
3
Buying Gold whilst hedging by shorting Silver.With the possible trend lines for gold (GC1!), it looks like we saw a fake break out of that range today, culminating in a doji candle. This on its own is not a good enough buy signal - granted, but if we overlay the price of silver (SI1!), we see that silver has shown a high correlation with gold but with higher peaks and troughs. With gold now at a point which I believe could be a new trough, silver has not yet kept up with this move. Therefore, I plan to buy GC1! and sell SI1!, with the view that silver has yet to get to its more extreme move lower to keep in line with its relationship with gold, and that gold has potentially reached a turning point in its price movement and is about to head up in price. I will exit the silver trade @ the trough of the gold move and aim to exit the gold trade once it reaches the top of the trending channel.
COMEX:GC1!
by WARDINVAI
3
A Wedge of Silver: Price Action Weakening to SupportSilver is, at times, violently volatile and noticeably a proxy for the US dollar. With the dollar at levels not seen since 2005 and 2006, sentiment for precious metals remain weak. There are two factors for this, and it does not matter which one chooses. The dollar has been able to hold current levels via the perception that the Federal Reserve will - at some point - incrementally increase the Fed funds rate. Many believe this will happen because the US central bank has not boosted rates since 2006, and it is just time to do so. Others actually feel the US economy is "strong" enough to handle a increase in rates; although, one only has to look to the mortgage applications to see how sensitive to rates Americans really are. The other fraction foresees deflation, if not just a prolonged level of disinflation. With over 20 central banks cutting rates this year alone, the currency war has been nasty. With each major central bank racing to devalue their respective currencies to zero value, the dollar is the de facto "winner." When currencies the dollar is pegged to within the dollar index drop, the dollar increases and further intensifies disinflationary pressures. That alone is negative for precious metals. What is not negative for precious metals is the likely reaction from the Fed to quell dollar strength and "boost" economic growth, more QE. Silver is currently trading within a descending wedge, a technical pattern that consists of two trend lines that follow the trend but with price action ranges that begin to narrow. What is striking is that wedges are reversal patterns. This does not mean silver is poised to jump to the upside immediately, but it is a pattern to watch out for. Essentially, price action will continue to narrow on weakening volume to a point of support. Then, prices rally. In regards to silver's wedge, traders are likely to push silver lower to support within the wedge as long as the dollar's strength remains. The wedge's descending trend began ounce silver failed to move significantly passed $18.50 per toz. Key support levels are seen at $16.05, $15.80 and $15.50 per toz. With using the wedge to a trader's advantage, the rally from support that breaks the descending resistance is typically a "false" move. A pullback from the breakout will likely occur to key support, likely to retest the former descending resistance now support. If it is a true breakout, prices will climb higher from the pullback to support.
FX:XAGUSD
by CommoditiesTrader
6
Silver set to outperform gold and platinum next yearThe platinum/silver ratio indicates right now that silver will likely be the best precious metal to buy at the start of 2015 if all metals start rallying like in January 2014. Please see my previous ideas on silver and on the silver/gold ratio to see why this metal in particular has caught my eye lately. If you're bullish on precious metals right now, give preference to silver as it has the most to gain if a bullish metals market does set in.
NYMEX:PL1!
by ABRAK75
1
If you're bullish on precious metals, give preference to silver***Please note that this chart is of the Silver/Gold ratio, not the Gold/Silver ratio as is indicated on the chart. Apologies for any confusion. The Silver/Gold ratio hit a very familiar zone that is worth taking a note of before the start of 2015. While gold is still above this year's opening price (it did briefly fall below in November), silver has gotten hammered. Fundamentally, I believe this is due to silver's industrial characteristics that make it much more exposed to slowing global growth, particularly in China. It's the same story for copper, which hit multi-year lows last week. Market participants have clearly preferred buying gold as they are more focused on central banks' accomodative policies, while these have not so far led to inflationary pressures that one would expect with quantitative easing programs. There isn't anything to suggest that these fundamentals are going to change in 2015. Central banks in the Euro Zone, in Japan, in China and elsewhere are still going to have very expansionary policies. Even if the Fed does start raising rates next year (markets anticipating between June and September), they will still remain extremely low on a historical basis. As for the global growth story, expectations are pretty low right now. Growth forecasts have been cut almost accross the board by all major international financial institutions (IMF, World Bank, central banks, etc.). Silver and industrial metals like Copper should therefore still be under pressure with headwinds coming especially from China's real estate market (falling housing prices). That being said, there is one silver lining that may allow for upside surprises next year : the fall in oil prices. Expectations for global growth are low since forecasts have been revised downward, but these forecasts might not have fully integrated the tailwind effect that a drop in oil prices may have for certain regions and sectors. If market psychology starts changing at the beginning of 2015, and if precious metals start rallying like they did in January 2014, I believe that silver will give the best returns for investors. The silver/gold ratio suggests this as it is testing a 17-year support right now. Past bounces in this ratio corresponded to 20+ percent moves in silver prices. Please see my previous ideas on silver to see why this metal in particular might just be a great buy opportunity towards the end of the year.
COMEX:SI1!Long
by ABRAK75
The Devil's Metal with a 14-HandleSilver has some extreme bearishness built up behind it. I am bullish long-term, but we are very likely to see a $14-hand on the metal. The nearest support is found at $14.62, while resistance can be seen at $15.60 (broken support). There are some growth worries out of China, which could give short-term support. However, there is endless central bank intervention which could hinder any significant upside. A close above resistance could be an inflection point upward, while more downside testing could be likely. A US Mint spokesperson reported Wednesday that the silver 2014 American Eagle has SOLD OUT. The Royal Canadian Mint had to put the maple leaf on ration due to record demand. Who said there's no demand? I would easily play either direction based on price action. For more, please visit: tinyurl.com
COMEX:SI1!Short
by CommoditiesTrader
Silver (SI) Bottoming on Weekly ChartSilver, like gold, is forming a significant bottom as its weekly and daily RSI, Stochastics and MACD have all either turned higher or are completing their bottoming stage. Significantly, silver has been trading within a price range that previously saw consolidation activity in the summer months of 2010 before silver skyrocketed to near 50. I`m not suggesting similar upside but at the very least, a respectable initial upside target in the 18.5-19 zone where previous support had been found in the first half of this year, which will likely coincide with the massive downtrend resistance line (as seen connecting the May 2011 peak to the July 2014 top). Feel free to visit stks.co for today's technical analysis on $GC_F, $SI_F, $USDX, $EURUSD, $USDJPY, $GBPUSD, $NG_F, $CT_F, $ZC_F, $ZW_F, $SB_F, $KC_F. Website: tradablepatterns.com FB: facebook.com Stocktwits: stocktwits.com Twitter: twitter.com Linkedin: www.linkedin.com YouTube: www.youtube.com Google+: google.com Email: info@tradablepatterns.com
COMEX:SI1!Long
by TradablePatterns
1
Silver's make or break appointment with NFP'sMake or break? I wish I knew. The last 3 years is almost always break, I think. Fact is that is so easy for sellers here, that if the line breaks there are going for targets lower derived from both triangles. Easy is sometimes suspicious. This weeks down candle volume is 1/4, up to this morning, of the volume of last week's doji. Posted current contract days ago, update here: Dimitri Speck's seasonal chart says that first two weeks of May are mostly bullish for the last 37 years. www.seasonal-charts.com Sentiment trader's data shows 28% bulls at support. Gofo rates 1-6 months are still negative. The best of luck, Cheers, Panos
FX:XAGUSD
by pantheo