Opportunities in Short Term Weakness in Precious Metals [Charts]

Momentum selling took gold and silver through more levels of technical support yesterday the market dealt with a number of negative influences.

The recent increase in volatility has forced a increase in margin requirements which tends to fuel short term selling in precious metals.

This coupled with continuing short term weakness in the equity markets, increased fears about the impact of Covid 19 on employment and the economy and a recent strengthening of the US dollar have all weighed heavily on gold and more so on silver which fell by a further 6.5% yesterday

As you will see from the gold chart, having fallen through support at $1,910 there is no major technical support until $1,810 and below that $1,750. The 200 Day Moving Average, currently sitting at $1,722 will be closely watched by traders and would provide very strong support for gold should the selling continue.

A bounce from here would encounter resistance at $1,910.

Silver has been even more volatile than gold as the white metal hit a low of $21.65 overnight.

Again momentum selling has taken siver through the support levels at $23.00 and $22.50 which will now become resistance on a move back higher.

With no technical support until $19.50 or the 200 Day Moving Average at $19.10 a deeper correction may be on the cards if the selling persists.

Stock markets are looking vulnerable and a further sell-off will effect all markets short term. However, this presents opportunities to establish new long positions in Precious Metals or add new positions at lower levels for those who understand and appreciate the long term benefit and potential for gold and silver.

NEWS and COMMENTARY

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U.S. stock futures see volatile moves following sell-off on Wall Street

GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

23-Sep-20 1888.10 1873.40 1483.48 1470.06 1611.49 1603.63
22-Sep-20 1903.10 1906.00 1487.46 1493.16 1621.63 1625.25
21-Sep-20 1930.90 1909.35 1503.21 1489.48 1638.18 1624.47
18-Sep-20 1954.75 1950.85 1505.16 1508.01 1647.85 1648.66
17-Sep-20 1936.10 1936.25 1494.67 1499.82 1642.78 1640.20
16-Sep-20 1964.80 1961.80 1521.15 1512.55 1654.56 1656.74
15-Sep-20 1963.55 1949.35 1523.13 1513.09 1652.13 1644.67
14-Sep-20 1942.30 1958.70 1511.69 1518.97 1638.14 1648.83
11-Sep-20 1944.50 1947.40 1519.82 1523.06 1639.41 1644.38
10-Sep-20 1944.80 1966.25 1493.41 1519.71 1643.74 1651.26
09-Sep-20 1928.40 1947.20 1489.69 1496.62 1638.56 1647.14
08-Sep-20 1920.60 1910.95 1467.72 1466.27 1626.17 1622.40
07-Sep-20 1928.40 1928.45 1463.08 1465.43 1629.88 1631.47
04-Sep-20 1937.60 1926.30 1456.49 1459.56 1634.75 1633.12
03-Sep-20 1934.10 1940.45 1453.86 1459.99 1635.28 1637.74

 

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