Gold and silver ratio falling as silver out paces gold


  • The price of gold sits between a range of $1,486.62 and $1,501.02, but bears in control.
  • The gold and silver ratio recent made a 50% Fibonacci retracement of the summer 2016 lows to 2019 highs.

The price of gold has continued to decline from the risk-off fuelled rallies which came on the back of heightened trade risks and various geopolitical disturbances which have shaken markets to their core during the summer period.   

Today, the price of gold sits between a range of $1,486.62 and $1,501.02, down -0.42% on the day so far. Silver, which had been making a sound come back, playing catch up with its sister metal, gold, is managing to attract a bid, currently, 0.78% on the day so far and has travelled from a low of 17.78 to a high of 18.17.

The gold and silver ratio is subsequently down -1.06% and has fallen from a high of 83.64 to a low of 82.31. The ratio recent made a 50% Fibonacci retracement of the summer 2016 lows to 2019 highs with the bias in favour of further downside on a break below the 200-week moving average located in close proximity.

Gold en-route to $1,480  

"With risk appetite surging gold looks to consolidate just below $1,500/oz with key central bank decisions on the horizon this week and next," analysts at TD Securities said.

"Given the skewed positioning and recent break of the $1,500/oz level, we would not be surprised to see the yellow metal trend toward $1,480 or slightly lower from here. But, the recent moves in risk markets have seen traders pare back their expectations of Fed rate cuts, which suggests that any additional downside from here should be temporary and represent a buying opportunity given the underlying economic weakness and dovish central bank tilt still remains."

Gold levels

The price is heavy while below the 21-day moving average and the 23.6% Fibonacci (Fibo) retracement of the July lows to recent swing highs as well as the 1500 handle. Bears can approach 1,478 as the 13 August volatility spike low which guards the 19 July swing highs at 1,452.93. Bulls will ned to get back above 1,550 which then guards prospects for 1,590 as the 127.2% Fibo target area. 

Silver levels

Bears are taking on the 21-day moving average still but the bullish pin bar is keeping bullish prospects alive. However, failure to advance beyond 18.80 will likely leave the door open for bears to jump in and force out a downside play to the17.50s a being the 50% Fibo of 2016 highs to recent swing lows. 

 

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