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.

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).