In evaluating the movements of futures over the past week, I noted increased market indecisiveness resulting from escalating U.S.-Iran tensions and Oman’s diplomatic efforts to mediate through a meeting between diplomats from both countries last Friday.
Though both the futures remain volatile amid changing news flow during the last week but experience some deviations on the technical charts, attracting enough to define the directional move, quantum of volatility, and the surge or decline in degree of deviation between both to continue further during the rest of the weeks of this month.
Undoubtedly, last week was a follow-up of a steep fall after testing record peaks by both the precious metals, so it was inevitable to experience a technical bounce, while the first day continued this exhaustion till the hopes of easing efforts mushroomed.
I observed the major difference between the gold and during the last four sessions, while the weekly closing was quite noticeable.
The gold futures after testing the day’s low at $4,423.36, faced stiff resistance at the 20 EMA while attempting to test the 9 EMA, but the rest of the week experienced attempts to hold above the 20 EMA and 9 EMA, after testing the 50 EMA support on the first session of the last week.
But silver futures behaved on the same line on the first day of the last week, as after testing the 50 EMA support, continued to face stiff resistance at the 20 EMA, and finally closed the week near the immediate support at the 50 EMA, after testing the next support at the 100 EMA.
However, closing level formations indicate that the silver futures could lead the price slide next week, if the silver futures start the week with a gap, maybe down or up.
But the exhaustion will continue as last week’s hype, created by President Trump, seems to be easing despite the presence of the US “Armada” near Iran.
Moreover, percentage-wise closing levels of the last week, gold futures closed Friday with a gain of 1.85% while silver futures closed with a mere 0.24%, indicating continuity of this deviation ahead.
I find that the gold futures could remain volatile despite a slide, as the silver futures look ready to lead this decline, as the possible formation of a bearish crossover in the daily chart of the silver futures nears completion.
I have attempting to draw my expected levels for the gold futures for the next week despite the fact that the US President Trump reverts to diplomacy, while the road is narrow for Iran, as President Trump has signed an executive order threatening to impose additional tariffs on countries that continue to trade with Iran.
In conclusion, I anticipate that if the situation on the Iranian Front remains intact as of last Friday, the spot gold-silver ratio () could experience a strong reversal from Friday’s closing levels.
Disclaimer: Readers are advised to take any position in gold and silver at their own risk, as this analysis is based only on observations.
