Silver plummets, gold price meets key resistance, may fall more than $30 (with trading strategy)

Spot gold fell 0.2% to $1,855.76 per ounce. US gold futures fell 0.4% to $1,856.90 per ounce.

After testing the 1871.55 resistance line, the price of gold fell back and may test the support of US$1,850.80 per ounce. US$1,875.55/ounce and US$1,850.80/ounce are the key levels that determine the next trend. The price of gold needs to break through the above resistance or fall below the above support in order to clarify the next trend goal.

The April gold futures of the Comex Division of the New York Mercantile Exchange had a 0.28% drop in price before the deadline, trading at USD1,858.70 per troy ounce. Earlier it was USD1856.15 per ounce. Gold is expected to find support at USD1835.60, and USD1878.90 will meet resistance.

Silver price plummeted

Silver prices plummeted on Tuesday. Silver fell back today after hitting a nearly eight-year high yesterday. Because the Chicago Mercantile Exchange (CME) raised margins, investors were encouraged to take profits.

Spot silver fell 1.6% to US$28.52 an ounce and jumped 7.3% on Monday to hit the highest level since February 2013 at US$30.03. The surge in the price of silver is due to retail investors flooding the market under the call of information on Reddit to push up prices.

CME Group CME.O raised its February Comex 5000 silver futures margin by 17.9% on Monday, from US$14,000 to US$16,500 per contract.

IG Market analyst Kyle Rodda said that CME's increase in silver trading margin and deter market speculation has already triggered some profit-taking.

Spot platinum fell 1.5% to US$1,110.77. Palladium rose 0.3% to $2,253.03.

Beware of silver bubbles

Eugen Weinberg, head of commodity research at Commerzbank, said that compared to the large-scale volatility caused by the influx of small-sized stocks and the small-scale silver market, the impact of larger markets such as gold is bound to be smaller, but it is not ruled out. Their subject matter.

But Weinberg also warned that the current excess liquidity in the system and the large amount of liquidity provided by the Federal Reserve (Fed) and the European Central Bank (ECB) will continue to push up certain asset prices. This phenomenon may not only create bubbles in the silver market, but also in the future. There may also be bubbles in commodities and other assets.

Platinum, palladium and other smaller precious metals will become the next target of retail investors, because these metals are easier to hold and easier to buy through ETFs.

Trading straregy (Source: Trading Central)

Pivot: 28.0600

Our preference: long positions above 28.0600 with targets at 29.2500 & 30.0500 in extension.

Alternative scenario: below 28.0600 look for further downside with 27.4400 & 26.6400 as targets.

Comment: a support base at 28.0600 has formed and has allowed for a temporary stabilisation.

Supports and resistances:

30.6500

30.0500

29.2500

28.4040 Last

28.0600

27.4400

26.6400

Guideline for Trading Central strategy'

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart：

・30MIN and 1H chart shows the trading suggestions for intraday

・Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is  MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators:  Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell.

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference.

4. [Comment] is the technical analysis of market trends and technical support for trading strategies.

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.