News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
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
More View more
Silver Prices Turn and Burn, Precious Metals Headed Lower

Silver Prices Turn and Burn, Precious Metals Headed Lower

Paul Robinson, Strategist

What’s inside:

  • Silver prices turn lower as anticipated
  • Sharp rejection from resistance indicates lower prices ahead
  • Watching for a lower high and break of rising slope support

To recap from yesterday: We laid out our logic explaining why the case was growing strong for a reversal in silver prices to begin very shortly; exhaustion-like price action coupled with an identified market tendency ran aground with pretty solid resistance – a perfect storm, if you will. (See yesterday’s commentary here.) The turn and burn with a vengeance gave us clear indication as to where sellers live and buyers don’t. While we didn’t expect that aggressive of a reversal to take shape (hard to predict), we will take it as our cue for lower prices ahead.

Silver (XAGUSD) Daily

Silver Prices Turn and Burn, Precious Metals Headed Lower

But, wait, didn’t the dollar also experience a sharp downward reversal, too? It must have been confusing to some as not only did precious metals, and crude oil for that matter, get bludgeoned, but it happened while the market brought the hammer down on the dollar as well. This is exactly why it is best to not get married to the notion that precious metals must trade inversely to the dollar, at least not in the very short-run. Yes, over the long haul there is a solid inverse relationship, but it hems-and-haws as correlations tend to do.

Where do we go from here? The reversal was very, very sharp; the kind of rejection at key resistance which clearly dents the chart and tilts the bias lower. Gold put in a pretty ‘sweet’ reversal bar as well after attempting to break strongly above the 1300 threshold.

Moving forward we will be looking for a lower high to develop soon. The bounce underway at this time is coming from the lower parallel extending back to June 1, and given how well the top-side line acted as support once it was crossed, it adds even more weight to the lower line as a point of support. With that said, however, support is not anticipated to hold for long given how fierce of a reversal from resistance we saw on the daily time-frame. A break below the trend-line and yesterday’s low of 17.13 should lead to a nice continuation short.

2-hr

Silver Prices Turn and Burn, Precious Metals Headed Lower

For real-time trader positioning updates, check out our ‘Speculative Sentiment Index’.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX, and/or email him directly at instructor@dailyfx.com

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

DISCLOSURES