Gold soared to a new all-time high overnight, coming within $20 of $4,200. But it met with some heavy selling once the European markets opened. This saw the price drop close to $100 (or 2%) in little more than an hour. Gold’s extraordinary move this year is the latest leg in a rally which, one could argue, began in 2015 when it was worth little more than $1,000 per ounce.
If one accepts that premise, then it’s fair to say that the rally is long in the tooth. But others may disagree with this, saying that most of gold’s gains have come over the last three years. If one accepts that, then the rally could have much more to go. But if so, investors and traders should prepare themselves for a lot more volatility.
All the easy gains have been made now, as gold, like the US stock market, took its time to take off, having steadily ground higher for a good couple of years, frustrating many would-be buyers, looking for a decent dip. It remains very overbought, according to its daily MACD. As does silver.
Source: TN Trader
Silver is living up to its reputation as gold’s unruly younger sibling. It also soared overnight to hit a fresh all-time intra-day high. But it too hit a wall of sell orders as Europe opened. Silver hit $53.60 but then lost $3 in an hour or so, giving back 5%. So, volatility is up, market spreads are widening, and volumes are thinning.
This may be a feature of the precious metals market as we get further towards year-end. That’s not to say gold and silver can’t go higher. But if they do, it’s going to be a much wilder ride from now on.
