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Silver struggles at downtrend littered with reversal patternsSilver’s been on a nice run recently, benefitting from an easing of concerns towards the trajectory for US economy. But with the move stalling ahead of levels where it's struggled in the past, and with major risk events approaching fast, are we on the cusp of yet another bearish reversal? Silver has rallied 14% from the early August lows It has been extremely correlated with other industrial metals such as copper over the past month, suggesting it’s more a play on the global economy Silver rally stalls at downtrend that’s sparked bearish reversals in the past Overview Silver’s been on a nice run recently, benefitting from an easing of concerns towards the trajectory for global US economy. That’s because unlike gold which has been heavily influenced by movements in the US dollar and bond yields, silver has been extremely correlated with copper futures over the past month, another industrial metal closely tied to economic activity. While concerns have eased recently, we’re about to receive a whole bunch of economic data that could easily see them flare again next week. Perhaps unsurprisingly, silver has struggled to extend the bullish reversal sparked by Jerome Powell’s speech last Friday, wobbling ahead of downtrend resistance dating back to the highs struck this year. Silver looking at another bearish reversal? When you look back to see how the silver price has interacted with this level previously, you can’t help but notice it’s littered with evening stars, bearish engulfing candles and key reversals, all notable topping patterns. It doesn’t like it. With RSI (14) rolling over, warning of waning bullish momentum, I wonder whether we may see a similar outcome soon? Wednesday’s candle, while incomplete, looms as a potential bearish engulfing, while the price is threatening to break out of the rising wedge it’s been in for several weeks. For those keen to take on the short trade, you could sell now or wait for better levels slightly higher with a stop above Monday’s high for protection. The initial trade target would be $28.77, conditional on the price being able to break the 50-day moving average. If $28.77 were to give way, $28.046 and $27.269 are the next levels to consider. If the trade moves in your favour, consider lowering your stop to entry level or lower, allowing for a free hit on downside. -- Written by David Scutt
WHSELFINVEST:SILVERShort
by WHSelfInvest
Silver - One of two (bullish) scenariosOANDA:XAGUSD recently broke a lot of strong, previous resistance towards the upside. Silver, metals in general, are experiencing increasing demand in 2024. Therefore, prices of Gold and especially Silver have been increasing for the past couple of months. Silver broke two major previous resistance levels towards the upside and these two levels are now obviously acting as support. If Silver manages to retest these areas, a bullish reversal will occour quite likely. Levels to watch: $25, $27.5 Keep your long term vision, Philip - BasicTrading
OANDA:XAGUSDLong
by basictradingtv
Will Copper Shine Brighter than Gold?Intricate dance between gold and copper prices is a tale beyond mere metals. It reflects global economic sentiments, industrial demand, geopolitical angst, and investment trends. Gazing into the crystal ball to decipher the future of the gold to copper ratio, a fascinating narrative unfolds, particularly highlighting copper's brighter prospects. Copper is displaying record futures premium unseen since 1994 fueled by supply side concerns. Beacon of positive economic data from China, is helping Copper shine brighter than Gold. This paper delves into the forces propelling copper and illustrates how portfolio managers can use the gold-to-copper ratio to gain risk reduced exposure to copper’s ascent. COPPER SUPPLY IS FACING PLENTLY OF HEADWINDS Mined copper and Refined copper are facing potential supply disruptions. Copper miners have benefited from the growth in supply over the past year. Australian mining giants reported higher annual copper production (BHP up 7% and Rio Tinto up 3%). Both benefited from a higher realized price. Copper mining costs for Australian miners were higher due to outages. While copper operations have done well, other commodities have not. Iron Ore, Aluminum, Platinum Group Metals, and Nickel prices are performing poorly. This has negatively impacted performance of mining majors. BHP profit was flat while Rio Tinto was down 9%. It is likely that miners will start scaling down production to boost profitability. Some have already started. For instance, Anglo American announced that it would lower its copper production guidance by 20% to 730k-790k tonnes. Mine outages are another source of concern. Macquarie Bank highlighted that disruptions remain elevated resulting in supply deficit of 700k tonnes in 2024. Copper shortage risks exacerbating the ongoing raw material shortage at refiners. Chinese copper smelters announced a rare joint production cut last month due to shortage of ore. Consequently, Chinese copper spot treatment charges (measure of refiner profits) plunged 75% in merely two months. Recent guidance from BHP (+7%) and Rio Tinto (+11%) point to a sharp increase in copper production signaling strong demand. Rio Tinto’s own smelter projects are coming back online this year, and its guidance suggests refined copper production will surge 40%. This will exacerbate ongoing raw ore shortage. COPPER FUTURES PREMIUM SURGES TO HIGHEST SINCE 1994 Potential supply disruptions are evident in the market. The contango for copper futures on CME Group is sharply steeper signaling even higher prices in the future. Source: CME QuikStrike Front-month futures are trading sharply higher than the spot price. According to Bloomberg, the gap between LME copper 3-month forward and cash market is at its highest since 1994. Copper prices are clearly sensitive to supply side shocks. CHINA’S RECOVERING ECONOMY SUPPORTS COPPER DEMAND Copper prices are shining bright. Supply constraint is not the only reason. Demand outlook is promising. Chinese economy has started to build up pace. Outlook however remains uncertain. Copper is overwhelmingly impacted by industrial and manufacturing activity and growth. Caixin’s China manufacturing PMI surged from 50.9 to 51.1 in March. It marked the fifth consecutive month of manufacturing expansion which augurs well for copper demand. However, demand side headwinds remain. Besides manufacturing, housing is a key sector driving copper consumption. Housing construction consumes copper for wiring and piping. Persistent housing slowdown will drag down copper demand. TECHNICAL SIGNALS POINT TO BULLISH COPPER COPPER GOLD Both copper and gold exhibit strong bullishness. Technical signals for copper are marginally greater than those for gold. Copper shows stronger positive momentum according to RSI while Gold’s momentum is fading. Gold also faces resistance at its R1 pivot point while copper has found support at its R1 pivot point. OPTIONS MARKET BODE WELL FOR COPPER RELATIVE TO GOLD Positioning on CME options market signals that both copper and gold have a bullish outlook. However, copper’s put/call ratio is lower, indicating a more bullish sentiment. Unlike gold, copper has seen a buildup of bullish positioning over the past week too. COPPER CME copper options have a put call ratio of 0.44 as of 4/April. Source: CME QuikStrike Changes to open interest have been bullish with a larger growth in calls relative to puts over the past week. GOLD CME gold options have a put call ratio of 0.72 as of 4/April. Source: CME QuikStrike Puts open interest has been on the rise, especially in near-term contracts over the past week. COMMITMENT OF TRADERS ALSO FAVOR COPPER OVER GOLD COPPER Asset managers have switched from net short to net long positioning over the past month in CME copper derivatives. However, the most recent report shows short positioning being built up sharply. GOLD Asset managers built up a large net long position beginning March in COMEX Gold. Since then, positioning has since remained unchanged at net long. Asset managers have also been consistently scaling back short positions over the last month. HYPOTHETICAL TRADE SETUP Copper is faced with the potential of worsening supply disruptions. Supply of raw ore for refiners is already disrupted, forcing them to become unprofitable. This situation is likely to worsen as Rio Tinto’s smelting plants come online through the year consuming even more raw ore. Supply of ore is also being cut by miners as they face unprofitable conditions. Supply of ore is also rising. Australian miners stated that production is expected to rise this year. Supply may become resilient if refiner’s scale back production. Demand favors copper with consistent economic recovery in Chinese manufacturing. Housing remains a headwind creating downside risk to demand. Copper prices are high and so is uncertainty on the path ahead. Prices are up 10% YTD as of 4/April. As such, a straightforward long position is risky. Demand at present is not higher, as suggested by the spot discount. In case the disruptions do not materialize, prices could pull back sharply. Alternative to an outright position in copper is the Gold-Copper ratio which exhibits strong mean reversion. The ratio is also elevated right now, owing to the massive rally in gold prices through 2024. Gold is trading near its all-time high, which is limiting demand and further price appreciation. Contrastingly, copper is still far from its highs of 2022. Expecting copper outperformance, a short position in the gold-copper spread can be used to gain exposure to copper’s tailwinds with lower risk. The following hypothetical trade setup comprises of a long position in CME Micro Copper Futures and a short position in CME Micro Gold futures. The position requires two contracts of Micro Copper for each contract of Micro Gold to balance the notional values. Each Micro gold contract provides exposure to 10 troy ounces of gold (representing a notional value of ~USD 23k. Each Micro copper contract provides exposure to 2500 pounds of copper (representing a notional value of ~USD 10.6k). • Entry: 558 • Target: 531 • Stop Loss: 567 • Profit at Target: USD 1,402 • Loss at Stop: USD 333 • Reward-Risk: 4.2x 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 www.tradingview.com 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:GC1!Short
by mintdotfinance
COPPER: 4month Support on the 1D MA200. Bullish.Copper is trading inside a Channel Down pattern that is approaching the bottom of a Rising Megaphone pattern. The price is almost neutral (RSI = 44.491, MACD = -0.036, ADX = 22.406), stuck between the 1D MA50 and 1D MA200. As the RSI is on the S1 Zone as well, the conditions for a longterm buy are pilling up. First we target the Channel Down top (TP = 4.1000) and if we get a daily closing over it, continue buying to R1 (TP = 4.3500). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
COMEX:HG1!Long
by InvestingScope
9
XAU-EUR 6/10/2020Hello guys, welcome to this analysis on XAU-EUR. As you can see on the chart it appears like Gold has made a distribution pattern since April that got confirmed by a high volume markdown below 1523 last week. The round arching formations above the 1520 level are usually an indication of weakness and distribution. This can be confirmed by the bearish divergence and series of lower highs and lower lows on the volume and cash flow indicators as well. Currently, price is retesting the 1520 ish zone of previous support which should act as resistant now. It can be a good entry for a short trade with a target of around 1430. This trade idea has 3 risk to reward ratio. Good luck trading :)
OANDA:XAUEURShort
by Trader_Shayan
3
Markets relax again amid concerns over global economyMonday was a very busy day in the financial markets in terms of price dynamics. The tone was set by China, which opened its stock markets after a long vacation. Expectedly, the market collapsed despite unprecedented restrictive measures by the Government and an infusion of nearly two hundred billion dollars from the Bank of China. The Shanghai Composite Base Index lost $420 billion in value over the day. Experts, meanwhile, note that China is well suited to act as a catalyst for a new global crisis (until recently, the States have done it well). The fact is that in recent years, the role of China in the global economy has grown dramatically. Today, it accounts for about a third of world growth, which is more than the share of the United States, Europe and Japan combined. So if Goldman Sachs analysts are right (they forecast a decline in China in 2020 at 0.4%), then the global economy will face serious problems. Despite the sales in China and the next anti-record coronavirus epidemic, investors again relaxed and calmed down. This already happened last week and turned out to be nothing more than a pause in the main movement. So, such gold descents as yesterday, we recommend using the asset for purchases. Moreover, by itself, the gold market could face a shortage. The fact is that the volume of gold mining in the world in 2020 decreased for the first time in 10 years. All easily recoverable metal has already been mined, which only strengthens the current negative trends for the offer of an asset. The pound dipped well yesterday. Although not the fact that this is its absolute minimum. The fact is that Great Britain and the EU, after the official withdrawal of the first from the Union, switched to the most important thing - the trade agreement. And then, predictably, the parties faced a problem. However, we have already gone through all this over the past 3 years. The parties will exchange threats, raise rates, put pressure on each other in an attempt to win the most favorable conditions for themselves. Given that the period until the end of the year, the pound is waiting for a difficult 8-9 months. We continue to believe that the parties will agree on how this ultimately happened with Brexit. And so we will use the pound's descents as an excuse for his purchases. At least the point 1.2980-1.3000 looks too attractive not to risk buying from it. But with mandatory stops, because it is likely that the pound can be bought even cheaper. Oil (WTI benchmark) yesterday fixed below the support of 51.20. In general, the situation looks rather threatening for buyers, especially since the background is generally favorable for further sales (oil demand in China collapsed by 3 million b/d, which is about 20% of its total consumption).
Long
by Trade24Fx
Platinum (XPTUSD): Bullish Megaphone towards a new Higher High.Platinum posted a strong rebound on the 871.00 October 2nd low and is currently rising on 1D (RSI = 62.934, MACD = 2.660, Highs/Lows = 16.6714) towards a new Higher High. The Higher High is designated by the 1M Megaphone pattern it has been trading within since August 2018. The 1D RSI patterns suggest that a new bullish leg may start without needing to make a Higher Low. Our Target Zone is 1,020 - 1,040. Keep in mind that XPTUSD has just initiated its new multiyear Bull Cycle, and we consider it a top investment in the coming years, a matter we analyzed on our long term analysis below: ** If you like our free content follow our profile (www.tradingview.com) to get more daily ideas. ** Comments and likes are greatly appreciated.
FX_IDC:XPTUSDLong
by InvestingScope
2