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FOMC

THE KOG REPORT - FOMC THE KOG REPORT – FOMC This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price. For this FOMC we have the following key levels which need to be monitored and can be used for potential spikes. 2630-25 support, which is too close to target from here could give us that push upside into the higher levels of 2650-55 and above that 2660-65. It’s that higher region we will want to be watching closely for a potential RIP and opportunity to then short back down as shown on the chart. Immediate levels are no good to us here if there is exaggerated volume in the markets on the release, or the press conference 30mins after. On the flip, if we continue the move downside breaking through the 2630 level we will be looking lower, 2610 as the point of interest but the extension of the move into the 2590-95 region is where we will want to be to waiting for the RIP and potential opportunities to then long back up. Simple one this time, if we don’t get the levels, we want we’ll stay out of it and come back tomorrow to look for a decent set up. Our bias target at 2667 still remains so please play caution. RED BOXES: Break above 2640 for 2650, 2660 and above that 2668 Break below 2625 for 2610, 2596 Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated. As always, trade safe. KOG
FX:XAUUSD
by KnightsofGold
8
Nasdaq 100 Index Plummets After Fed DecisionNasdaq 100 Index Plummets After Fed Decision On 17th December, analysing the Nasdaq 100 chart (US Tech 100 mini on FXOpen), we: → Drew a blue upward channel relevant for 2024; → Noted that the price was near the upper boundary of the channel, while the RSI indicator had entered the overbought zone; → Suggested that bulls might face difficulties in pushing the price to a new all-time high. Yesterday, the Fed cut the interest rate by 0.25%. Although it was anticipated, the market reaction was sharply negative. The Nasdaq 100 (US Tech 100 mini on FXOpen) dropped by approximately 4%. The steep market reaction was driven by Fed Chair Jerome Powell’s comments during the press conference, where he stated that the FOMC plans to cut rates only twice in 2025, contrary to market expectations of four cuts. Technical analysis of the Nasdaq 100 (US Tech 100 mini on FXOpen) chart shows that: → The price remains in the upper half of the channel, supported by the 21,230 level, which previously acted as resistance (as indicated by arrows). → We can assume that the area around the median of the blue channel (marked by orange lines) could act as a barrier to further downward momentum, as medians often serve as equilibrium zones where supply and demand balance out. What’s next? According to analysts at Zacks, record highs for the tech stock index may not be a topic of discussion in the near future. There is a possibility that a local descending channel could form, potentially driving the price into the lower half of the broader upward channel. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:NDQM
by FXOpen
2
BTC DECEMBER FOMC Going into FOMC the consensus is we'll see a 25bps cut from the FED (95% chance), this would take interest rates from 4.75% to 4.5%. Because the expectation of a cut is so certain, we can assume that the markets have priced this in so baring any craziness in the form of a different result we should see market sentiment remain the same, bullish. A FED pause,(although unlikely according to data) would be very bearish in the the short term in terms of volatility. I would expect to see price revisit the $98-99K mark where the 4H 200EMA would roughly be. In a bullmarket the 4H 200EMA can be used as a great support level often bouncing off of it. For a 25bps cut which is the expected outcome, we have two paths IMO. The bullish path is consolidation under the ATH then a break above, retest and off we go towards $110,000. The bearish path is a loss of this key S/R level after a consolidation above support and break under with a confirmed retest of new resistance. I know it's typical "could go up, could go down", however it's the context that matters here. Alts have taken a back seat for the last week or so, BTC.D at a key level and a rejection off this level would mean alts can play catch-up while as BTC consolidates. We very rarely see BTC drop and altcoins pump so this is the most likely outcome to me baring no upsets in FOMC.
by ProR35
10-year Treasury Yield Surging ahead last FOMC in 2024After a politically charged November, bond markets have shifted their gaze back to economic fundamentals, setting the stage for a crucial Federal Reserve meeting on December 17. Recent data—including a robust jobs report and rising inflation—have reignited debates over long-term yields and the Fed’s future rate trajectory. With the Fed’s dot plot and 2025 outlook in focus, the bond yield rallies ahead of the meeting reflects heightened anticipation of pivotal policy signals. This piece unpacks the dynamics driving Treasury yields and explores a potential trade setup deploying CME Yield futures to navigate the unfolding market environment. MARKETS ARE FOCUSSING ON ECONOMIC DATA AGAIN In November, U.S. Treasury yields were more influenced by political factors than by economic data. The 10-year Treasury yield remained largely unchanged after the 13/Nov CPI report, which showed headline CPI rising to 2.6% year-over-year in October, up from 2.4% in September. While the higher inflation suggested potential risks to bond yields—given that prolonged inflation could lead the Federal Reserve to slow its pace of rate cuts—Treasury yields were mostly unaffected by the data. Instead, yields declined sharply when markets opened on November 25, following President Trump’s announcement of Scott Bessent as his pick for U.S. Treasury Secretary. Bessent, a fund manager, is anticipated to prioritize tax cuts and fiscal caution. The announcement drove the 10-year Treasury yield nearly 30 basis points lower over the next week, reaching its lowest level in over a month. In the past two weeks, however, market focus appears to have shifted back to economic data. The non-farm payrolls report for November, released on December 6, exceeded expectations with 227,000 jobs added. Additionally, October’s dismal figure of 12,000 jobs was revised upward to 36,000, providing further support to the positive sentiment. The improved jobs report soothed investor concerns, signalling that the state of the US economy may not be as bad as previously perceived. The jobs report eventually drove a 5-basis point recovery over the following week. The latest CPI report for November also reaffirmed the trend that investors were focussing attention on economic data as 10Y yields surged after the report, rising nearly 19 basis points from the 09/Dec low. 10Y-2Y spreads have also surged by 8 basis points since 09/Dec. Investors can monitor the yield spreads using CME’s Treasury watch tool . Source: CME TreasuryWatch The tool can also be used to monitor the yield curve. Over the past month, the decline in Treasury yields has been concentrated in shorter-term tenors (2Y, 3Y, and 5Y), while the 30Y yield has remained largely unchanged. In contrast, the increase in yields over the past week has been more uniform across all tenors. Source: CME TreasuryWatch The November report showed inflation rising even further to 2.7%, although in-line with expectations, it suggests that inflation may be more persistent than previously perceived. This has led to expectations of a higher inflation premium for long-term treasuries which may have contributed to the rally in 10Y treasury yields. FED DOT PLOT REMAINS THE HIGHLIGHT NEXT WEEK Markets are almost certain of a 25-basis-point rate cut at the FOMC meeting on 17/Dec, with FedWatch indicating a 97% probability of this outcome as of 16/Dec. However, the primary focus will likely be on the Fed's guidance for the rate trajectory in the coming year. Alongside the rate decision, the Fed is expected to release its dot plot and summary of economic projections at the December meeting. The December meeting is crucial as participants closely monitor the outlook for 2025. At last year’s December meeting, the Fed projected significant rate cuts in 2024, which triggered a substantial equity rally and a decline in bond yields. Source: CME FedWatch Per CME FedWatch, market participants expect an additional 50 basis points of rate cuts in 2025. However, the Fed's September dot plot indicated expectations for 100 basis points of cuts in 2025. If the December dot plot reaffirms the projection of 100 basis points, bond yields could decline sharply. Source: Federal Reserve BOND YIELDS HAVE RALLIED HEADING INTO THE MEETING IN THE PAST The 10-year Treasury yields have rallied ahead of three of the last four FOMC meetings, with the increases notably concentrated in the three days leading up to the meetings. Given the recent trajectory of 10-year yields, a similar pattern may be likely this time. The 10Y-2Y spread has shown a similar trend, increasing ahead of the last three FOMC meetings. However, following the November meeting, the 10Y-2Y spread declined. This suggests it may be prudent to position ahead of the meeting to mitigate potential post-meeting volatility. Hypothetical Trade Setup Market participants are nearly certain of a rate cut at the upcoming FOMC meeting, but the summary of economic projections is likely to carry greater significance. Currently, market expectations for rate cuts in 2025 are more conservative than the Fed's previous dot plot. If the Fed reaffirms expectations for more aggressive rate cuts next year, bond yields could sharply reverse their two-week rally. While the 10-year yield outlook remains uncertain and subject to risk, the 10Y-2Y spread has a more optimistic trajectory. The spread stands to benefit from expectations of further rate cuts and its ongoing normalization trend. Additionally, historical trends suggest that positioning before the FOMC meeting may be advantageous, as the spread corrected after the last meeting. Investors can express a view on the steepening of the 10Y-2Y yield spread using CME yield futures. CME Yield Futures are quoted directly in yield with a 1 basis point (“bps”) change representing USD 10 in one lot of Yield Future contract. This simplifies spread calculations with a 1 bps change in spread representing profit & loss of USD 10. The individual margin requirements for 2Y and 10Y Yield futures are USD 330 and USD 320, respectively, at the time of writing. However, with CME’s 50% margin offset for the spread, the required margin drops to USD 325 as of 16/Dec, making this trade even more compelling. The below hypothetical trade setup provides a reward to risk ratio of 1.94x: Entry: 13.5 basis points Target: 30 basis points Stop Loss: 5 basis points Profit at Target: USD 165 (16.5 basis points x USD 10) Loss at Stop: USD 85 (8.5 basis points x USD 10) Reward to Risk: 1.94x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT_MINI:10Y1!Long
by mintdotfinance
Gold Awaiting the FOMCGold prices are experiencing a recovery after hitting a six-day low at $2,605, consolidating around $2,625. Market attention is focused on the November Fed meeting minutes, which could provide decisive signals regarding a possible rate cut in December, currently estimated at a 61% probability according to the CME FedWatch Tool. If the intraday support at $2,605 fails, prices could target $2,550. Conversely, a daily close above $2,670 would be necessary to reignite bullish momentum, with targets at $2,700 and $2,750. The fundamental context remains complex: Donald Trump's statements on new tariffs have reignited demand for safe-haven assets, including gold and the US dollar, while rebounding bond yields cap enthusiasm for the precious metal. Decreasing geopolitical tensions between Israel and Lebanon represent an additional headwind for gold, as they reduce the need for global risk hedging. Additionally, Trump's appointment of Scott Bessent as Treasury Secretary has reassured bond markets, strengthening the dollar and limiting gold's gains. Overall, gold prices are balanced between contrasting fundamental and technical forces, as traders await the Fed minutes for clearer direction.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
XAUUSD - The rise of gold is over!?Gold is above EMA200 and EMA50 in the 4H timeframe. In case of a corrective movement with low momentum, we can witness the continued rise and see supply zones and sell within that range with a suitable risk reward. After enduring two weeks of sharp declines following Donald Trump's election victory, the gold market bounced back with a strong bounce last week. The price of this precious metal grew in all trading sessions of the week and by Friday afternoon, with an increase of nearly 150 dollars, it once again attracted the attention of investors. Commerzbank commodity analyst Carsten Fritsch notes that the Swiss Federal Customs Service released data on gold exports in October this week. "These data showed very different trends. Deliveries to China were significantly weaker at just 5 tonnes. Almost no gold was exported to Hong Kong. On the other hand, exports to India have increased. However, the export level in October was still relatively low at 11.7 tons. A little more gold than the previous month has been delivered to America. However, inflows of 30 tonnes into US-listed gold ETFs, reported by the World Gold Council (WGC), in October were higher than the 9.4 tonnes reported. The sharp increase in Swiss gold exports to the UK to 31.9 tonnes is surprising, although gold ETFs listed there recorded outflows in October, according to the World Gold Council. Darin Newsom, chief market analyst at Barchart.com, stated in his analysis of the future trend of gold: "The path of movement of gold is still upward. But due to the speed and intensity of the recent upward trend, there is a possibility of a sudden correction in the market. This risk increases due to the Thanksgiving holiday in the United States and the end of the month." He also emphasized: "Despite this, geopolitical factors continue to play a decisive role in the market. The current chaos has overwhelmed technical analysis and Russian President Putin has not backed down from his nuclear threats. These conditions will most likely lead investors to buy gold until the end of 2024." Next week, the US economic calendar will be shorter than usual due to the Thanksgiving holiday, but several key reports will continue to be in the focus of traders. On Tuesday, the Conference Board's consumer confidence index for November and new home sales for October will be released in early market hours. Next, the minutes of the last meeting of the Federal Reserve Open Market Committee (FOMC) are published. On Wednesday, key data releases will be limited to the early hours of the day due to the Thanksgiving holiday. The market will watch the release of the Personal Consumption Expenditure (PCE) core inflation index for October, which is one of the key indicators considered by the Federal Reserve to assess inflation. At the same time, the statistics of durable goods orders and the weekly report of unemployment claimants will also be published. Then, pending home sales figures for October will be released, which will provide a clear picture of housing market trends.
FOREXCOM:XAUUSDShort
by Ali_PSND
TIA/USDT 4H Celestia is a project that has a lot of potential this Bullrun, we saw an early surge in the beginning of the year once the project was released nearly one year ago. A modular blockchain network, first of its kind is an exciting new technology and we've seen how well new projects do during their first Bullrun often outperforming their older rivals. I would like to see the bullish pennant formation playing out now. The bearish downtrend breakout caused by a republican victory results in a breakout & retest of the BULLISH OB as new support. Now a bullish pennant has formed midway up the mini range, normally this is a continuation pattern and with the bullish narrative in play I think it's probable we see this pattern play out fully with the resulting rally hitting resistance around the $6 mark (BEARISH OB). IF deciding to take the trade once the parameters are met a conservative 2.25R trade is in play , once the first TP is hit the larger SL can be moved to Break Even . I do believe that TIA continues to move beyond the $6 mark however there is a lot of resistance there for now. A separate trade outlook will be needed to tackle that area.
by ProR35
XAU/USD : Bullish Movement Ahead ? (READ THE CAPTION)Analyzing the #Gold chart on the 4-hour timeframe, we see that yesterday’s bearish trend played out as expected, hitting all downside targets at $2717, $2700, and $2686, even extending further to $2643. This aggressive decline resulted in over 1000 pips of movement within a single day. Currently trading around $2670, gold faces a significant liquidity gap, and with the interest rate decision due tonight, I expect the price to recover and potentially fill this gap. Expect heavy market volatility—trade cautiously! Please support me with your likes and comments to motivate me to share more analysis with you and share your opinion about the possible trend of this chart with me ! Best Regards , Arman Shaban
OANDA:XAUUSDLong
by ArmanShabanTrading
98
GBP/USD tests key 1.30 handle ahead of FOMCThe pound rallied following the Bank of England’s decision to cut interest rates earlier. Governor Bailey refrained from defining what “gradual” would mean for the pace of future cuts. The GBP/USD rally was aided by a sharp drop in the US dollar. The focus is now turning to the FOMC rate decision, which means the greenback could change course again. The Bank of England lowered rates by 25 basis points to 4.75%, aligning with market expectations. The Monetary Policy Committee voted 8-1 in favor of the cut, as anticipated. However, the BoE maintains it can’t lower rates “too quickly or by too much,” opting instead for a more measured approach. The central bank sees a gradual easing as appropriate, keeping to its September guidance on rates. The recent budget is expected to lift inflation slightly, adding around 0.5% to CPI at its peak according to the BoE —just above the forecast from the Office for Budget Responsibility (OBR). Like the OBR, the BoE isn’t expecting significant economic growth from this budget. As it stands, the Bank intends to continue cutting rates gradually over the coming months. This should keep the GBP under pressure. Will the GBP/USD now hold below the key 1.30 handle or break above it? What it does here will determine the near-term direction. All eyes are on the Fed Chair Powell. The Fed could shed light on the central bank’s next steps. Markets are fully expecting a 25-basis-point reduction. Chair Powell may steer clear of any commitment to a rapid easing cycle, especially if he believes Trump’s policies could drive inflation. Any indication of hawkishness could boost bond yields further, which could give the dollar another boost. Even though rate expectations have shifted, significant changes in market trends are unlikely in the immediate term. However, over the coming quarters, rising US yields could strengthen the dollar, adding pressure on other economies while supporting the US market’s broader trend. By Fawad Razaqzada, market analyst with FOREX.com
by FOREXcom
GBPJPY: Day 3 breakout traders long!Hi everyone and welcome to my channel, please don’t forget to support all my work subscribing and liking my post, and for any question leave me a comment, I will be more than happy to help you! “Trade setups, not movements” 1. DAY OF THE WEEK (Failed Breakout, False Break, Range Expansion) Monday DAY 1 Opening Range Tuesday DAY 2 Initial Balance Wednesday DAY 3 (reset DAY 1) Mid Point Week Thursday DAY 2 ✅ Friday DAY 3 Closing Range 2. SIGNAL DAY First Red Day First Green Day 3 Days Long Breakout ✅ 3 Days Short Breakout Inside Day 3. WEEKLY TEMPLATE Pump&Dump Dump&Pump ✅ Frontside ✅ Backside 4. THESIS: Long: this is currently my main thesis at the moment, the market itself is still inside the previous weekly range, but in the new week is pumping higher making constantly higher highs and higher lows. Day 3 breakout traders long is a signal that depending on the template can explode in the direction of the trend or reversal. However, yesterday the market closed out of balance and today it can still keep going higher targeting the previous HOW, completing then 2 weeks of dump and pump template. Today, Asia placed a higher high into the yesterday HOD and is currently retesting the most recent low. FOMC and other news are in schedule for the day, but if the price will consolidated around the current level, I would be willing to take this long opportunity for 100+ pip. Short: at the moment I'm not interested in the short scenario, unless the market will pump back up into the closing price of yesterday, consolidating for a short trade opportunity which I will consider only a scalp, eventually back into the current LOD. Please note that the purpose of my analysis is to help me and you hunting the best trade setup for the day, none of my technical aspects are a way to forecast any directional market movement. Gianni
by GianniPichichero
17
XAUUSD - gold waiting for the Federal Reserve meeting!Gold is below the EMA200 and EMA50 in the 4H timeframe. In case of an upward correction by the FOMC today, we can see a supply zone and sell within that zone with a suitable risk reward. Donald Trump’s victory in the Tuesday presidential election could alter the economic outlook of the United States and influence the Federal Reserve’s policies in the coming months. Concerns about how much pressure Trump might exert on the U.S. central bank in his second term have resurfaced. In his campaign, Trump has pledged to impose stricter tariffs on America’s trading partners, deport millions of unauthorized immigrants, and extend the tax cuts approved in 2017. If these policies are implemented, they could exert upward pressure on prices, wages, and budget deficits, creating significant challenges for the Federal Reserve. Under these circumstances, the Federal Reserve will face increased obstacles in achieving its 2% inflation target while maintaining employment levels. Furthermore, if Trump continues his pattern of public criticism of Jerome Powell, the Fed chair, the U.S. central bank may find itself under political scrutiny. The Federal Reserve officials have decided to lower interest rates by 25 basis points today, following a half-point reduction in September. The September forecasts indicate another quarter-point cut for December and a full one-percentage-point cut planned for 2025. Following the rate announcement, Powell is likely to address questions in a press conference about the impact of the election on Fed policies. During Trump’s first term, he faced repeated criticism from him, and recently, Trump has criticized Powell for delays in policy decisions.
FOREXCOM:XAUUSDShort
by Ali_PSND
XAGUSD - Silver Vs FOMC?!Silver is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. If the decline continues due to the FOMC today, we can see demand zone and buy within that range with a suitable risk reward. If the upward trend continues, silver can be sold within the specified supply zone. World Bank analysts believe that silver is a precious metal worth monitoring in 2025. The World Bank has recently updated its commodity market forecasts. While gold is expected to maintain its strong performance within the broader market, analysts have forecasted weaker demand extending from next year through 2026. The analysts noted, “Demand for gold from central banks and the jewelry sector, which together constitute about two-thirds of global demand, is likely to decrease due to unprecedented high prices.” Nevertheless, the World Bank sees greater potential in silver, given expectations that rising demand and limited supply will help support prices. World Bank analysts further stated, “Silver demand is anticipated to increase steadily in the forecast horizon, driven by its dual financial and industrial uses.” With supply growth lagging behind the positive factors supporting demand, silver prices are projected to increase by 7% in 2025 and by 3% in 2026, following an expected 20% increase in 2024. Many analysts expect silver to outperform gold by 2025, as it is currently priced well below its intrinsic value. Nomura believes that a second Trump administration would focus heavily on tariff and tax policies, potentially leading to inflationary pressures and slower economic growth. Nomura forecasts that the Federal Reserve will respond prudently to these changes. The Federal Reserve is expected to implement two rate cuts this year, followed by a single cut in 2025, and then take a prolonged pause on further cuts.
OANDA:XAGUSDShort
by Ali_PSND
Hedging Price Risk in Silver in a Pivotal Week This is a big week for financial markets, a long-anticipated election in the US is likely to have widely varying impacts across major asset classes. Safe haven assets such as silver stand to benefit from the uncertainty. There is also an FOMC meeting scheduled on 7/Nov (Thu) where the Fed is widely expected to cut rates by 25 basis points. A lower rate environment also serves as tailwind for silver. Finally, the Chinese parliament is expected to announce details of fiscal stimulus on 8/Nov (Fri). Fiscal stimulus in China also stands to benefit silver through higher investment demand as well as industrial demand. In what should fundamentally be a strong week for silver, prices have entered the week on a bearish note following a 3.4% decline last week. While fundamental outlook for Silver remains bullish, this eventful week may drive unwanted volatility. Indeed markets are expecting large moves in silver prices with silver options IV near a 1-year high. Source: CME Group CVOL Investors can strategically deploy CME silver weekly options along with a long position in silver to capitalize on the fundamental increase while remaining protected against volatility. BULLISH FUNDAMENTAL OUTLOOK FOR SILVER Mint Finance covered some of silver’s bullish fundamental drivers in a previous paper . In brief, robust growth from the photovoltaic (PV) sector is driving high demand. PV installations are surging, with global solar installations up 29% year-over-year, driven by aggressive climate policies and energy transition goals. This increase has directly boosted silver consumption, essential for PV production. At the same time, silver markets have stayed in a supply deficit for the past four years. Silver miners have struggled to keep pace with the rapidly increasing industrial demand. China’s massive stimulus package—its largest since the pandemic—also plays a crucial role, freeing up liquidity to revitalize its struggling economy. This stimulus supports sectors like PV and electronics, key industries for silver usage, while bolstering consumer confidence, which translates into heightened demand for silver in electronics and jewellery. Investment demand for silver has started to pick up pace. Since July, U.S.-listed silver ETFs have seen over $942 million in inflows, particularly after the Fed’s rate cuts, which makes non-yielding assets like silver more attractive. HIGHER SILVER JEWELLERY DEMAND IN INDIA The recent festival season in India saw high demand for silver as buyers opted for it over gold. Silver sales by volume are expected to have increased 30-35% YoY while gold sales fell by 15% according to data from the Indian Bullion & Jewellers Association. Rising investor interest in silver is partly due to its relative affordability compared to gold, which is trading at an all-time high. While high gold prices are dampening demand, especially for physical gold and jewellery, silver remains more accessible, supporting increased investment. Rising investment demand, particularly for jewellery, risks pushing silver further into deficit. While jewellery demand for silver had been modest in recent years, 2022 saw a significant increase. According to the Silver Institute, jewellery demand is projected to grow by 4% in 2024 (but below 2022 levels), with actual demand potentially exceeding this due to the strong seasonal trend. Increased demand would further tighten silver supplies, likely driving prices higher over the next year. UPCOMING FOMC MEETING AND CHINA STIMULUS TO DRIVE SENTIMENT China’s parliament has started it five-day meeting on 4/Nov (Mon) and is expected to announce the details of the fiscal support on 8/Nov (Fri). Analysts suggest the fiscal plan could reach 10 trillion yuan ($1.4 trillion), with most funds likely allocated to refinancing local government debt. A substantial fiscal stimulus plan is likely to support silver prices. Recent economic data from China has also shown a recovering industrial sector as China’s manufacturing PMI rose from 49.8 to 50.1 in Oct as the manufacturing sector shifted into expansion after 5 months of contraction. In case the trend continues, stronger industrial demand also stands to push silver prices higher. SILVER IN THE MIDST OF CORRECTION DURING UPTREND Silver continued its bullish momentum from September into October but has corrected sharply over the past week. During the rally earlier this year, when silver prices corrected, they were able to find support at the 38.2% and 61.8% Fibonacci levels. With Silver presently just above the 38.2% level, it may find support here. Silver’s performance in the past two months has closely aligned with monthly pivot points. In both September and October, prices tested these pivot levels before moving higher. However, recent tests have shown smaller deviations from the pivot compared to prior months, suggesting that volatility could push prices slightly lower during this month’s test. There is strong reason to believe that the general bullish trend is likely to continue into next year. According to a poll at the LBMA precious metal conference, delegates expect silver prices to rise to USD 45/oz over 2025, reflecting a 37% increase from present levels. Precious metal analysts were highly optimistic about silver, stating that higher industrial demand combined with continued supply deficit was likely to drive strong gains. SEASONALITY SUGGESTS POTENTIAL FOR LARGE GAINS IN NOVEMBER Silver prices closed out October with a 4.6% increase but are currently nearly flat for November. Historically, November has been a mixed month for silver, with an average price increase of 1.88% since 2000, though with high standard deviation. Notably, only 42% of Novembers have shown positive gains. Despite this variability, past performance shows periods where silver either consistently declined or consistently rallied over multiple Novembers. Over the last two years, November has seen significant growth in silver prices; if this recent trend persists, silver could experience strong gains this month. SILVER’S PERFORMANCE AROUND ELECTIONS Certain safe haven and risk assets (gold, silver, BTC) stand to benefit from a Trump presidency. Historically, elections have impacted silver prices in varying ways. Following the Trump victory, silver stands to benefit. Looking at silver’s historical performance in the two weeks following elections since 1980, prices increased by an average of 0.7% when a Republican replaced a Democrat president. The Democrat-to-Republican shift has led to price rallies in two-thirds of cases. SILVER’S PERFORMANCE AROUND FOMC MEETINGS As mentioned, lower rates have a positive impact on non-yielding investment assets such as silver while also boosting industrial demand during periods with loose monetary policy. During the Fed easing cycles in 2001, 2007, and 2019, silver reacted positively to Fed rate cuts in 68% of cases (performance measured 1 week after FOMC meeting with monetary easing) with an average of 0.9% appreciation on the CME Silver front month contract. Source: CME FedWatch CME FedWatch tool is suggesting that a 25-basis point rate cut is most likely at the upcoming meeting on 7/Nov with a probability of 98%. As the outcome is largely anticipated, the impact of the meeting on silver prices may be minimal. HYPOTHETICAL TRADE SETUP Silver remains bullish with strong fundamental drivers including the rapid growth in the PV industry and strong investment demand. This week, several major events are expected to drive significant volatility in the silver market. While these events are generally anticipated to boost silver demand, prices may remain unstable and could see short-term declines. Silver is currently trading near its support levels, but increased event-driven volatility this week could lead to significant price swings. In late October, for example, silver briefly surged nearly 4% above usual resistance levels during short bursts of volatility. Although trading volume remained concentrated near the support level, the risk of sudden, sharp moves remains. This could result in a long silver position being prematurely closed out. With a long position in silver futures at risk from near-term event risks, investors can deploy CME weekly options to hedge a long position from near-term volatility which increases tail risk. In the following hypothetical trade setup, investors can combine a long position in CME micro silver futures expiring in December (SILZ4) at an entry of 32 with a protective put using CME silver weekly options expiring on 8/Nov (Fri) (SO2X4) at a strike level of 31 (delta 20, premium of 0.087/oz or USD 435) offers a compelling trade setup while remaining hedged against near-term volatility. Using a delta-20 put option keeps the position fully delta-hedged for the week, as the delta of the long micro silver position aligns with the option’s delta at 20. Since each micro silver contract is one-fifth the size of a full contract, this setup effectively maintains the hedge. In case prices dip below 30.64 by Friday due to volatility from the election, FOMC meeting, and China parliamentary meeting, the put option would offset any losses from the futures leg. In the later part of the month, the outlook for silver is likely to be bullish given the fundamental factors highlighted above, in case prices rise, the position would become profitable above 32.44, offsetting the premium paid for the short-term option. The scenarios in which the position loses: 1) In case prices remain between 30.64 and 32.44 2) In case prices fall below 30.64 following the put option expiry on 8/Nov The scenarios in which the position profits: 1) In case prices fall below 30.64 before the put option expiry on 8/Nov 2) In case prices rise above 32.44 at any point It should be noted that it would be prudent to set a stop loss on the long futures position following options expiry at 31 to minimize losses in case of a decline after options expiry. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
COMEX_MINI:SIL1!Long
by mintdotfinance