Technical analysis of gold and silver
I have put together some interesting charts using the weekly time frame because they provide a cleaner picture of what to look for in the financial markets over the next months. When general investors are looking for a safe haven they buy gold. Active traders and seasoned investors like to buy silver because it can post massive returns while gold is bogged down with tens of thousands of sellers. I find silver moves in a more emotional pattern panic buying and panic selling , and with that comes volatility for sharp parabolic spikes and fast sell offs. This chart below is the weekly chart showing a clean bull flag breakout.
Gold Price
While many folks choose to own the metal outright, speculating through the futures , equity and options markets offer incredible leverage with measured risk. In addition, not all investment vehicles are created equally: Some gold instruments are more likely to produce consistent bottom-line results than others.
Novices should tread lightly, but seasoned investors will benefit by incorporating these four strategic steps into their daily trading routines. Meanwhile, experimenting until the intricacies of these complex markets become second-hand. As one of the oldest currencies on the planet, gold has embedded itself deeply into the psyche of the financial world. Each of these forces splits down the middle in a polarity that impacts sentiment, volume and trend intensity:.
Market players face elevated risk when they trade gold in reaction to one of these polarities, when in fact it's another one controlling price action. However, inflation may have actually triggered the stock's decline, attracting a more technical crowd that will sell against the gold rally aggressively.
Combinations of these forces are always in play in world markets, establishing long-term themes that track equally long uptrends and downtrends. Gold finally topped out and turned lower in after reflation was completed and central banks intensified their quantitative easing policies.
Gold attracts numerous crowds with diverse and often opposing interests. These are long-term players, rarely dissuaded by downtrends, who eventually shake out less ideological players. Gold bugs add enormous liquidity while keeping a floor under futures and gold stocks because they provide a continuous supply of buying interest at lower prices. They also serve the contrary purpose of providing efficient entry for short sellers , especially in emotional markets when one of the three primary forces polarizes in favor of strong buying pressure.
They are especially popular in highly conflicted markets in which public participation is lower than normal. Take time to learn the gold chart inside and out, starting with a long-term history that goes back at least years. This oscillation impacts the futures markets to a greater degree than it does equity markets , due to much lower average participation rates.
CME offers three primary gold futures, the oz. Average daily volume stood at Trade the gold market profitably in four steps. First, learn how three polarities impact the majority of gold buying and selling decisions. Second, familiarize yourself with the diverse crowds that focus on gold trading, hedging, and ownership.
Third, take time to analyze the long and short-term gold charts, with an eye on key price levels that may come into play. Finally, choose your venue for risk-taking , focused on high liquidity and easy trade execution. World Gold Council. Federal Reserve.
Federal Reserve Bank of St. Smithsonian National Museum of American History. Federal Reserve History. Accessed April 3, CME Group. Metals Trading. Your Money.
Personal Finance. Your Practice. Popular Courses. Part Of. Introduction to Gold. Investing in Gold. Trading Gold. Gold and Retirement. Commodities Gold. Table of Contents Expand.
What Moves Gold. Understand the Crowd. Read the Long-Term Chart. Choose Your Venue. Bottom Line. Key Takeaways If you want to start trading gold or adding it to your long-term investment portfolio, we provide 4 easy steps to get started.
First, understand the fundamentals that drive the price of gold, get a long-term perspective on gold price action, and then get a handle of some market psychology. Once all that is done, choose the best way to acquire gold, either directly in physical form or indirectly through futures or a gold ETF or mutual fund. Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Partner Links. Related Terms Gold Option A gold option is a call or put contract that has physical gold as the underlying asset.
Silver ETF A silver exchange-traded fund ETF invests primarily in raw silver assets, which are held in a trust by the fund manager or custodian. What Does Gold Bug Mean? What Is a Gold Fund? A gold fund is a type of investment fund that commonly holds physical gold bullion, gold futures contracts, or gold mining companies.
Technical analysis is one of the key (if not THE key) tools for estimating gold's future price. Find out more and profit on it. (Kitco commentary) - Get the Big Picture view on gold, silver and other precious metals markets with Kitco Senior Analyst. With thorough analysis, get a sense of.
Kitco commentary - Below are today's likely price locations of buy and sell stop orders for the active Comex gold and silver futures markets. Kitco commentary - Get the Big Picture view on gold, silver and other precious metals markets with Kitco Senior Analyst. With thorough analysis, get a sense of today's market as well as where it may be heading. Be in the lead. Interactive Chart.
As of writing, the pair was down 0.
While many folks choose to own the metal outright, speculating through the futures , equity and options markets offer incredible leverage with measured risk. In addition, not all investment vehicles are created equally: Some gold instruments are more likely to produce consistent bottom-line results than others. Novices should tread lightly, but seasoned investors will benefit by incorporating these four strategic steps into their daily trading routines.
SILVER Technical Analyses
Silver prices are once again on the rise, after the United States Federal Reserve announced a massive open-ended bond buying programme earlier this week. Silver technical analysis over the medium term shows that a major recovery has occurred, after the metal bounced from the bottom of a falling wedge pattern on the daily time frame. It is noteworthy that falling wedge patterns are usually bullish reversal patterns. Silver price technical analysis shows that a major reversal has occurred after price bounced from the bottom of a falling wedge pattern. Perhaps the most surprising events of the last several weeks have been the declines in gold and silver prices, which are both assets that tend to see strong buying activity during times of risk and heightened uncertainty. At the same time, even the most bearish precious metals traders must concede that successful asset class selection in this market environment has been a nearly impossible task.
Precious metals investment terms A to Z
Technical analysis is the analysis of financial markets from the point of view of past data. In other words, technical analysis aims to prescribe in which direction the price of a given asset is more likely to move given the way this asset trades now and has traded in the past. In the most classic formulation, technical analysis can be understood as the analysis of assets based on the historical price and volume data. With such an approach, we look at how the price of an asset has evolved, how this fits in with the past price patterns and we do the same for volume. A very straightforward example of such an approach could be described as follows: suppose we have an asset X and we look at its price in order to get an idea if X could trade higher or lower on the next day. We notice that currently X has appreciated for seven days in a row. This is the current situation. We then go and look at all the historical prices of X and search for the situations in which X appreciated for seven days straight.
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