FOREXYARD: Forex News Blog | |
- Why Silver’s Rising Price will Outpace Gold’s
- USD/CHF Set for Bullish Correction
- Gold Likely to Enter Downward Correction
- Commodities Prices Rally as Unrest in the Middle East Proceeds
| Why Silver’s Rising Price will Outpace Gold’s Posted: 21 Feb 2011 03:30 AM PST
No doubt every trader in the market at this week's start noticed the sudden surge in commodity prices. Precious metals like Gold and Silver in particular have gained an exorbitant amount over the past month. But are their price movements on par with one another? Looking at the fundamental side, the tensions spreading across the Middle East and North Africa have indeed carried a high impact on commodity prices; Gold and Crude Oil especially. Oil's price rise appears in line with the safe-haven Gold, but fundamental factors affecting the speculation of oil supply disruptions are more likely behind Crude's latest price moves and may be more sharply affected by developments in the region. Gold and Silver, on the other hand, are affected not only by risk flight, but also technical speculation, as well as industrial demand, in the case of Silver. The difference between these latter two is particularly interesting for traders. Whereas Gold has a large market of buyers and sellers, the Silver market is relatively thin, leading to higher volatility in silver trading. Gold's rising price was fueled by a large market of technical buyers who have been purchasing on dips following the break past $1340 per troy ounce. Silver, however, has breached its 30-year high price level, meaning there is little technical data a trader can base his/her trades on from reviewing the charts. The lack of historical resistance lines above where Silver currently trades, as well as the thin market of Silver traders, means Silver prices possesses an above-average tendency to become overextended. Silver is also tied with electrical component industries as well as solar panel producers, which have seen rising profits over the past few years on recent hi-tech surges and energy diversification, respectively. Gold prices are approaching the strong historical resistance level of $1420 an ounce, but Silver has no such historical line in sight. Analysts are using this information to anticipate a bullish run in Silver prices over the next week or two, whereas Gold may find resistance relatively soon and dip back down towards the $1340 price level. |
| USD/CHF Set for Bullish Correction Posted: 21 Feb 2011 02:35 AM PST
Last week bearish movement of USD/CHF cross hasn't received much support as of late. Below, I will demonstrate that the USD/CHF pair has already commenced a upward trend for today, and the cross may rise another 50-110 pips in the coming few days. Traders are strongly advised to take advantage of the trend at an early stage. Therefore, why not open long positions at an excellent price? • Below is the 8-hour chart of the USD/CHF currency pair. • The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI) and Slow Stochastic. • Point 1: The Slow Stochastic indicates an impending bullish cross, which may signal an upward movement is going to occur in the near future. • Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure. • Point 3: Williams Percent Range also supports the upward direction. USD/CHF 8-Hour Chart |
| Gold Likely to Enter Downward Correction Posted: 21 Feb 2011 12:20 AM PST
Gold prices rose significantly in the last week and peaked at $1396.76 an ounce. Gold has made a significant upward correction, which can be directly correlated with the bullish trend of the EUR/USD cross. However, the daily chart is suggesting that a recent upward trend is losing steam and a bearish correction is impending. This recent activity has raised the stakes for traders. From here on, the forex and commodity markets will see very high volatility indeed. • Below is the daily chart for gold by ForexYard. • The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range. • Point 1: The Slow Stochastic indicates an impending bearish cross, signaling that the next move may be in a downward direction. • Point 2: The Williams Percent Range has peaked at the 0 marker and has turned bearish; this means that there may actually be a strong level of downward pressure. • Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure. Gold Daily Chart |
| Commodities Prices Rally as Unrest in the Middle East Proceeds Posted: 20 Feb 2011 11:30 PM PST
In the forex frontier there isn't any exciting news; due to the weak U.S. economic reports investors continue to sell the dollar and the EUR/USD pair crossed the 1.3700 level as a result. Traders should note that several economic releases are expected from the euro-zone today, and disappointing data has potential to correct the trend. The more relevant developments right now are taking place at the commodities market. As you must have heard, the Middle East has been boiling for the last month. The protests began in Tunisia and continued to Egypt and as a result boosted commodities prices. For the past week it seemed that the unrest in the Middle East has ended, and crude prices were lowered as a result. However, the tension in the Middle East reached new highs recently, this time in Libya, and partially in Iran, both oil producing nations. As a result, commodities prices are soaring once again. Crude is trading around $91.50 a barrel and gold is trading near $1,395 an ounce. As long as the unrest continues, not to say spread to other oil-producing nations in the region, crude and gold prices have potential to climb further. As for today, traders should take under consideration that we might witness a relatively calm trading day in the forex market as U.S. bank will be closed in observance of President's Day. Today's leading news event looks to be the German Ifo Business Climate, which is scheduled at 09:00 GMT. It is a survey of about 7,000 businesses which are asked to rate their current business conditions and expectations for the next six months. If the end result will top expectations for 110.3, the euro might strengthen further against its major currency rivals. |
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