We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • S&P 500 Forecast: Stocks Face Peril as Day of Reckoning Looms Link: https://www.dailyfx.com/forex/fundamental/article/special_report/2020/06/01/spx-sp500-forecast-stocks-face-peril-as-day-of-reckoning-looms.html $SPX $SPY $ES_F #StockMarket #Investing #Analysis https://t.co/sufK8mMtD4
  • #ASEAN currencies (such as SGD, IDR, PHP and MYR) are relatively outperforming the #USD at a stronger pace than the Indian #Rupee vs the Greenback. This is despite notable gains in the MSCI #EmergingMarkets Index. Full $USDINR, #Nifty piece to come later today! https://t.co/n0SlkfnYOV
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/9gFVefFC3w
  • ⬇️Asia-Pacific Preview⬇️ - Wall Street buoyancy may spill over into Asia as investors shrug at domestic unrest - AUD and #NZD could rise with APAC stocks despite HK risks - #AUDUSD blew past key resistance and may now challenge multi-week swing-high https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/06/01/AUD-NZD-May-Rise-With-APAC-Stocks-Ahead-of-RBA-Rate-Decision.html
  • 🇰🇷 GDP Growth Rate YoY Final Actual: 1.4% Previous: 2.3% https://www.dailyfx.com/economic-calendar#2020-06-01
  • 🇰🇷 GDP Growth Rate QoQ Final Actual: -1.3% Previous: 1.3% https://www.dailyfx.com/economic-calendar#2020-06-01
  • 🇳🇿 Building Permits MoM Actual: -6.5% Previous: -21.7% https://www.dailyfx.com/economic-calendar#2020-06-01
  • Trumps says he will deploy military if cities, states won't act. Says he is dispatching 'thousands' of armed soldiers -BBG
  • Trump says he recommended governors deploy National Guard, told them to deploy guard to 'dominate' streets -BBG
  • US President Donald Trump: His first duty is to defend the country, people. Instances of violence 'acts of domestic terror'. Mobilizing civilian, military resources to stop rioting -BBG
Silver May Rally If Correlation to Gold Kicks In

Silver May Rally If Correlation to Gold Kicks In

2016-01-06 12:49:00
Alejandro Zambrano, Market Analyst
Share:

Silver prices are little changed today despite elevated risk-aversion and gold prices being close to breaking their December high of $1088.80. If gold does break its $1088.80 high, it can be expected that the trend would turn bullish, and this would suggest that silver prices should also be trading higher.

If it was down to gold prices exclusively, a regression model (based on daily prices over the last 6 months) suggests that silver should be trading at $14.38 (currently at $13.99). In other words, silver is in desperate need of a catch up with Gold and would be close to breaking its downward trend.

This can be used by traders that are looking for silver prices to catch up with gold. These traders would use the January 4 low of $13.77 as a base for their bullish view.

The alternative scenario (and my main scenario) is for Gold to remain capped by the $1088.80 high and for traders to keep buying the dollar despite an economic slowdown in China, as suggested by this week’s disappointing PMI Mfg. and PMI Services figures. This would make more sense as at this stage, the Fed would probably need to see a softer labour market and inflation not picking up before it reverts to raising rates further. This I something I think today’s FOMC minutes will echo.

With this in mind, I expect that traders will most likely opt to fade a rally near $14.25 with stops above $14.40. On a successful break to $14.40, silver may reach the December 2015 high of $14.62.

How do you know if a trade is good or not? You could use the risk-reward ratio as outlined in the The Traits of Successful Traders Guide.

Silver | XAG/USD

Please add a description for the image.

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

Learn more about trading and join a London Seminar

To be added to Alejandro’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.