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.

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
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: -0.03% 🇯🇵JPY: -0.04% 🇨🇭CHF: -0.09% 🇨🇦CAD: -0.18% 🇦🇺AUD: -0.30% 🇬🇧GBP: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/zrfx5KPV5X
  • EU's Šefčovič: says Brexit talks are difficult but constructive $GBP
  • 🇫🇷 Unemployment Benefit Claims (OCT) Actual: -56.6K Previous: -15.2K https://www.dailyfx.com/economic-calendar#2020-11-25
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: France 40: -0.17% US 500: -0.18% Wall Street: -0.25% Germany 30: -0.36% FTSE 100: -0.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/arymbmpUKF
  • Heads Up:🇩🇪 Bundesbank Wuermeling Speech due at 11:15 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-11-25
  • As a trader do you know when the markets let you take a break? Find out when the stock markets are closed. Check out @DailyFX holiday calendar here. https://t.co/M3ndtjxrOd https://t.co/EZ7emLN3F6
  • Heads Up:🇫🇷 Unemployment Benefit Claims (OCT) due at 11:00 GMT (15min) Previous: -15.2K https://www.dailyfx.com/economic-calendar#2020-11-25
  • 🇿🇦 Business Confidence (Q4) Actual: 40 Previous: 24 https://www.dailyfx.com/economic-calendar#2020-11-25
  • Heads Up:🇿🇦 Business Confidence (Q4) due at 10:00 GMT (15min) Previous: 24 https://www.dailyfx.com/economic-calendar#2020-11-25
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/0W1ajO9IiF
Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

2020-11-19 20:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Silver Price, Platinum Price Forecast Overview:

  • Even as the US Dollar has failed to rally, precious metals’ prices haven’t had an easy going. But gold, silver, and platinum are not moving in unison. A key differentiating factor may be the reason why: real economic utility.
  • Both the silver/gold and platinum/gold ratios have risen throughout November, tracking gains in equity markets and optimism around coronavirus vaccines developments.
  • Recent changes in sentimentsuggest that silver prices have a bullish outlook in the short-term.
Advertisement

Precious Metals Complex Diverges

Optimism has defined the first two-plus weeks of November, with global equity markets pressing higher amid news that multiple coronavirus vaccines were proving effective in Phase II and Phase III trials. Amid news that coronavirus vaccines are proving promising and moving towards distribution among frontline healthcare workers by the end of this year, investors’ optimism has provoked more risk taking in financial markets. This optimism for a vaccine has proven detrimental for safe havens like gold, silver, and platinum.

Gold Forecast
Gold Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free Gold Forecast
Get My Guide

Economic Need, Industrial Usage Prop Up Silver and Platinum

With US real yields rising, the precious metals complex has been harmed. Unlike gold, however, silver and platinum are not just seen as safe havens, but benefit from the renewed economic optimism. Both silver and platinum have utility in the real economy: they are used in jewelry and industry (automobiles, batteries, electronics and solar panels, for example). The rebound in global consumption coupled with optimism around a COVID-19 vaccine(s) has strengthened the real economic foundation upon which silver and platinum prices rest.

SILVER-GOLD (ORANGE) & PLATINUM-GOLD (BLUE) RATIOS: HOURLY CHART (NOVEMBER 2020) (CHART 1)

Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

Both silver and platinum prices have outperformed gold prices throughout November, with the respective XAG/XAU and XPT/XAU ratios rising over the first two-plus weeks of the month. It may be the case that, even in an environment defined by low interest rates and substantial fiscal stimulus, gold prices may continue to lag silver prices and platinum prices in the near-term.

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Christopher Vecchio, CFA
Trading Forex News: The Strategy
Get My Guide

SILVER PRICE TECHNICAL ANALYSIS: DAILY CHART (NOVEMBER 2019 TO NOVEMBER 2020) (CHART 2)

Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

Silver prices remain within their bull flag/triangle, which has been in place since the end of July. A sideways range has been carved out in recent weeks, dating back to September, between the 23.6% and 38.2% Fibonacci retracements of the 2020 low/high range (22.8996/25.5594).

It may be the case that the break through the coronavirus pandemic trendline is insignificant if the triangle is the predominant focus. Unfortunately, momentum is flat. Silver prices are still intertwined among their daily 5-, 8-, 13-, and 21-EMA envelope. Slow Stochastics are pointing lower but straddling their median line, while daily MACD is flat at its signal line.

Traits of Successful Traders
Traits of Successful Traders
Recommended by Christopher Vecchio, CFA
Traits of Successful Traders
Get My Guide

IG Client Sentiment Index: Silver Price Forecast (November 19, 2020) (Chart 3)

Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

Silver: Retail trader data shows 88.59% of traders are net-long with the ratio of traders long to short at 7.76 to 1. The number of traders net-long is 2.15% lower than yesterday and 2.20% lower from last week, while the number of traders net-short is 2.23% higher than yesterday and 7.51% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Silver prices may continue to fall.

Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Silver price trend may soon reverse higher despite the fact traders remain net-long.

PLATINUM PRICE TECHNICAL ANALYSIS: DAILY CHART (NOVEMBER 2019 TO NOVEMBER 2020) (CHART 4)

Silver Prices, Platinum Prices Outpacing Gold for One Key Reason

Platinum prices have a more bullish technical footing than silver prices, with the downtrend from the July and September highs breaking as of the close on November 18. Follow through to the topside is gathering pace, with platinum prices breaking higher above the descending trendline from the March 2008 (all-time high) and January 2020 highs.

Platinum prices are above their daily 5-, 8-, 13-, and 21-EMA envelope (and the difference between the daily 5-EMA and daily 21-EMA is increasing). Daily MACD is rising at an increased pace above its signal line, while Slow Stochastics are comfortably nestled in overbought territory. The path of least resistance is higher in the near-term.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

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

DISCLOSURES