& Last week, gold and silver started a correction mode, with open interest on both the Chicago Mercantile Exchange and the New York Mercantile Exchange showing a downward trend. However, when the oversold signal flashed, last Friday B broke the news and reopened the investigation of Hillary Clinton's email scandal. Gold and silver prices turned from falling to rising, hitting the monthly high of US dollars per ounce that day.
Dramatic silver price trends are more popular and can provide a preview of gold trends
Spot Silver
Although this price rise seems dramatic, it has already laid the groundwork. The U.S. dollar has been in the overbought range for some time. Although the short-term trend is still bullish, the inadvertent events on Friday may give the U.S. dollar an opportunity for an early correction. It is clear that gold and silver's downward momentum has eased on the back of this event, and further testing of lows will require a surprising negative factor. The performance of precious metals in 2019 has been regarded as a star asset by investors, and now as the end of the year is approaching, the next step in the price of gold and silver will determine whether they can aspire to be the annual income champion.
Gold’s volatility is becoming more like a currency
Gold prices have been hovering in a range of $.USD/oz to $.USD/oz since March. However, since gold's breakthrough rise on Friday, gold prices have escaped from the oversold zone, and the relative strength indicator now shows a relatively stable state.
Previously, as the probability of the Federal Reserve raising interest rates continued to increase, the open interest of gold bulls fell from 100,000 to 100,000, and more than % of the longs withdrew from the market. However, by the end of last week, long positions had risen again, seemingly suggesting that gold prices had bottomed.
In addition, as of last Friday (Month), the historical daily volatility of the gold futures market averaged .%. In general, commodities tend to have higher volatility than other assets, especially currencies. However, statistical measurements now suggest that gold futures volatility is now behaving more like a currency than a commodity.
The trend of silver provides a outlook for gold
Many investors will say that the trend of silver price has always been a replica of gold price. Silver prices have been hovering in a range of $.$/oz to $.$/oz since March. Meanwhile, silver has also recovered from oversold territory and open long interest is slowly climbing. Last Friday, the historical daily volatility of the silver futures market was about %, which is the lowest level of silver's daily volatility.
Silver is now looking for a breakthrough direction in the trapped area, but judging from historical trends, silver's trend is more likely to provide clues to the future direction of gold and silver. Since Brexit, silver’s movements have been hinting at changes in gold prices. On March 1, the price of silver rose to the year's high of US$/ounce, while the price of gold reached the year's high on March 1. The price of silver began to fall on March 1, and the recent decline in gold prices began on March 1.
Dramatic silver price movements are more popular
However, silver’s movements are more dramatic. Therefore, investors holding large positions are more inclined to enter silver than gold due to liquidity considerations. market. Likewise, silver, like gold, had been consolidating until last Friday and showed an important long turning point on Friday.
As central banks of various countries
have become net buyers of gold in 2018, negative interest rates and the prevalence of Q are constantly expanding their balance sheets. h columnist Hh said that as long as gold and silver can stand firmly above the US dollar/ounce and the US dollar/ounce respectively, he believes that precious metals will still dominate the world in 2020. However, in the next few months, remember to operate with a full position and keep an eye on the trend of silver, which will provide signals for the trend of gold.
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