Is Silver the Dark Horse?

Gold prices came under pressure yesterday but have since recovered as the dollar weakened across the board during the NY session and that weakness continues this morning as well. Yesterday, China announced that it plans to impose curbs on gold imports and this is likely to affect the demand for gold in the medium term as China is one of the major consumers of gold along with India. With reports suggesting that India might also impose certain laws that would restrict the import of gold, we saw gold prices come under pressure and it reached as far low as 1160 before it began its slow bounce back. The NY session saw a bout of dollar weakness and this helped to push the price back above 1170 and it sits at 1172 as of this writing. We expected any kind of upmove to be limited by the strong resistance at 1205. With the NFP employment data from the US out today, it could be a volatile day for the gold traders as a strong report could bring back the dollar bulls and put the gold prices under pressure once again.

Oil continues to be the star of the week and as we had forecasted yesterday, we continue the effects of the deal made during the OPEC meeting, on the oil prices. We have seen oil prices rise by close to 20% over the past 48 hours as the prices pushed through $50 and sits just below $51.5 as of this writing. As we had mentioned in our earlier forecasts, we expect the price to stall just above $52 and then we would expect some correction to take place from there and this would provide us with an opportunity to go long. The current move has been too swift for the retail traders to load their longs and make some decent money out of it and that is why we had advised users to sit out the move and wait for a correction to load their buys.

Silver continues to consolidate and range below $17 and we have an increasing feeling that it might be the dark horse for the investors once they realise that the shine in gold is wearing off. Gold prices are expected to continue to be under pressure and with oil being too volatile and being controlled by a few, we expect the traders and investors to next focus their attention on silver as it seems to be stable for now and looks like a good long term opportunity.