Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Wire
Silver Waterfall Hits Danger Zone
November 30, 2021 - (Gold Market Wire)- Silver's waterfall has been fairly dramatic, as the US dollar surge takes its toll on the metal. Unlike Gold, which has just hunkered down and waited out the storm, Silver has swung wildly to the downside, taking it on the chin for almost 10% over the past two weeks.
Now we approach the horizontal support line, and Silver really needs to hold here:
The disparity between the movement and Silver and Gold gives a salient lesson to all traders. Silver is where the wild-eyed gamblers hide out, and you trade it at your peril, if you can't manage size correctly. Additionally, hyper-sensitive nimbleness is a pre-requisite of trading this Metal. When trends get broken, you need to jump out of the way quickly.
If we look at the above chart, through the haze of the volatility, we can, of course see a perfect, reverse Head and Shoulders, with the continuation that got us right up to the high in mid-November. Now we face the horizontal, and we will need to hold to prevent the next down move. Gold is giving us some hope, but as we can see, Silver can really "do its own thing", even while Gold sleeps through the cacophony. Also, the recent pullback in the US Dollar's relentless rally could give us a shot to recover here.
So, for those inclined to gambling, this looks a slightly better than Red/Black at the Casino. If you favour gambling, you could do worse than a spec long in Silver if(!) the horizontal holds. But this is knife catching stuff so be prepared to cut if it goes wrong.
In no way are we abandoning our stance that the US Dollar rally will continue. This kind of action is so fundamental in nature, we think it will run until there is a complete break up, as von Mises would say, "of the currency system involved." We've had several attempts at breaking the 1.0375-104.50 level in Eur/USD - and we are likely on the road to another before long. As the system flames out, we will see the metals perform. For right now, strategy is key. Spec length in Silver for the gamblers. For the more reasonable heads amongst us - Length in Gold against the trend line, with a firm eye on the US Dollar retracement vs. the Euro.
Gold has shown some mettle in the past few weeks while Silver has been in the asylum. There are signs today of a potential reversal. Risk/Reward tells us to position in length.