Precious metals slump
This year may have seen some long-overdue positivity to precious metals, but the last three weeks have not been kind to the bulls. Today’s slump looks like it has done huge damage to many leveraged buyers, forcing them out of long-held positions. Sentiment has taken a real bashing, to gold holders certainly, but even more so for silver bulls, many who must have hoped that they’d never see $30 per ounce again.
These kind of moves are typical when gold and silver markets come to life. And despite the apparent devastation, there are some positives. For a start, gold, the senior precious metal, has held above $2,300 – so far. The MACD looks as if it is in the process of resetting at neutral levels as many of the weaker hands will have retired from the field of battle. Yet all that has happened is that gold has pulled back to levels seen at the beginning of May. Could this set a base from which gold can push higher? Or is the more weakness to come?
Silver is a much scarier metal to trade than gold. Its volatility is legendary, and today’s drop of 6% in a straight line is the kind of movement which leads bullish traders to swear never to touch silver again. Yet, as with gold, today’s fall has taken prices back down to levels seen just a couple of weeks ago. Silver was overbought, and now it is less so. It may have to fall further still to reset its MACD, but could it also be setting up for a bigger upside move as we get further into the year?
These kind of moves are typical when gold and silver markets come to life. And despite the apparent devastation, there are some positives. For a start, gold, the senior precious metal, has held above $2,300 – so far. The MACD looks as if it is in the process of resetting at neutral levels as many of the weaker hands will have retired from the field of battle. Yet all that has happened is that gold has pulled back to levels seen at the beginning of May. Could this set a base from which gold can push higher? Or is the more weakness to come?
Silver is a much scarier metal to trade than gold. Its volatility is legendary, and today’s drop of 6% in a straight line is the kind of movement which leads bullish traders to swear never to touch silver again. Yet, as with gold, today’s fall has taken prices back down to levels seen just a couple of weeks ago. Silver was overbought, and now it is less so. It may have to fall further still to reset its MACD, but could it also be setting up for a bigger upside move as we get further into the year?
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