[caption id="attachment_741" align="aligncenter" width="500" caption="mini Gold and Silver"][/caption]
Like the rest of the market, commodity traders have been going through some wild rides this year. If anything, their ride is significantly more thrilling because of the leverage.
Of all the commodities, Gold and Silver are my favourites. Even though I don't trade the futures market anymore, I still keep an eye on them. Furthermore, I have a vested interest in precious metals because of my exposure in SLW.
As I have noted last month, I am long term bullish on precious metals like every one else. Heck, I think it's a one in a life time investment opportunity. In times of crisis, hoard gold. And we are in as bad a crisis as ever. Investment opportunity doesn't get any more obvious that this. Yet, the reality is that we are in an obvious down trend since the price highs in July 15. Coincidentally, we are exactly 4 months after that peak today.
Yesterday's bounce of the market coincided with a reversal in the precious metal prices too. In fact, whereas today's market retraced a bit, the gold and silver prices continued higher. They are up 39 and 0.736 respectively to 743.50 and 9.54.
I must say, I am not as confident in analyzing commodity prices because I lack an edge in the futures market. I merely look at the price and the e-mini volumes. The e-mini's are just a small piece of the global precious metal market. There are the full-size futures, various exchanges around the world, the spot market, and what not. Then there's the non-trivial relation of gold to US\$ exchange rates, since gold is a world commodity but its price is based in the US dollar... and so on and so forth.
Anyway, I'll make do with what I have.
Looking at the gold and silver prices in the chart, we are still well within a trading range. Could this be a turning point for them too? I have no idea.
The way I play the gold and silver prices is simple -- I don't. I just follow them. Even though we have shot up 70 points in gold, I think it's too early to say if we're truly on the rise from here yet.
However, not that I'm just rambling here, I do have a point. I think observing the prices of gold and silver around that marked trendline around 757 and 10.3 will be the best indication yet. Since the wild swings of recent prices in gold and silver have been spinning my head, I think we are approaching a significant breakout.