Analyzing Silver’s January Technicals
Among the other precious metals trading on the COMEX, silver shares for March expiration maintained an almost flat end to the day, closing at $16.8 per ounce on January 11, 2017. Platinum fell $6.4 and traded at $976.4 per ounce. Palladium shares for March expiration fell $11.4 to close at $753.9 per ounce.
Because silver closed at $16.8 per ounce, it was still trading at a premium of almost 6% to its 100-day moving average price of $17.8 per ounce. The RSI (relative strength index) for gold was 54, much higher than its mid-December low of 37. Silver’s call-implied volatility was almost 20% during the previous week.
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Gold and the other precious metals have been significantly influenced by changes in the US dollar over the past two months. The fall in the dollar following President-elect Donald Trump’s speech on January 11 caused a corresponding rise in gold. Gold and the dollar are inversely related to each other. The lower the demand is for the dollar, the higher the demand is for dollar-based assets such as precious metals.
Leveraged mining funds such as the Direxion Daily Gold Miners ETF (NUGT) and the ProShares Ultra Silver ETF (AGQ) have risen 4.7% and 2.9%, respectively, on a trailing-five-day basis. Hecla Mining (HL), Kinross Gold (KGC), Alacer Gold (ASR), and IAMGOLD (IAG) have risen 3.6%, 1.5%, 3.8%, and 6.9%, respectively, during the same period.
Combined, these four miners make up ~6.1% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).