RJO FuturesCast

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Metals

Silver Eyes $20.00 After Spike in Volatility

Posted 10/25/2019 7:39AM CT | Eli Tesfaye

Since July 2019, Silver has continued to outperform gold. The gold/silver ratio is around 84.50, relative to what it was in July of this year hitting approximately 93.39 on weekly bases. I still expect to see silver continue to appreciate relative to gold. It is impressive how silver held its ground considering dollar strength-today! Fed meeting in a few weeks. Would they cut-rate?  Maybe .25 base point? Who knows. Well, any cut would favor silver. There is a talk of progress in trade negotiating with Beijing.  

From a technical perspective, a closer look shows that momentum is turning up. The bulls continue to enjoy a technical advantage. There is formidable support around $17.00 that needs to hold per close bases; otherwise, the bear will resume. Also, the commitment of traders with options report measured last week shows the non-commercial and non-reportable position hold sizable longer over 118K contracts.  Given where we are now trading around 17.80 in the December futures, more longs came to the market. It would take a real fundamental change for sides to switch.

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Eli Tesfaye

Senior Market Strategist
Eli started his career in the futures and options market while he was in graduate school finishing up his MBA in 2003. Eli specializes in Automatic trading strategies and systematic options trading strategies in futures market. He has been Series 3 license holder since 2005. Eli's is an avid reader, runner, and yoga practitioner.
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