-
Silver tumbles nearly 5%, dropping below the $50 level for its largest single-day loss since April.
-
The correction follows a surge of retail FOMO, often seen as a contrarian signal by seasoned investors.
-
Key factors include easing US political risk, renewed US-China trade optimism, and a technical breach of the accelerated uptrend line.
-
Silver tumbles nearly 5%, dropping below the $50 level for its largest single-day loss since April.
-
The correction follows a surge of retail FOMO, often seen as a contrarian signal by seasoned investors.
-
Key factors include easing US political risk, renewed US-China trade optimism, and a technical breach of the accelerated uptrend line.
The correction follows a period where images of queues outside physical bullion shops circulated globally, suggesting a surge of FOMO (Fear of Missing Out) among retail clients previously unfamiliar with precious metals. The entry of the least experienced investors into a market is frequently considered a contrarian signal.
While the market's underlying fundamentals remain robust, pullbacks are a regular feature, especially when several catalysts align:
- US Political Risk Eases: News emerged yesterday of a potential deal between Republicans and Democrats this week, paving the way for the US government to resume operations. This development potentially removes a layer of geopolitical risk from the market.
- Trade Optimism: Donald Trump has declared that a trade agreement with China will be "magnificent," and he plans to meet with Xi Jinping at the APEC summit later this month.
- COMEX Inventory Shift: Silver inventories at COMEX have begun to decline, a trend that could signal the metal's return to London.
Silver is recording its largest daily decline since April. Historically, movements of this magnitude have been exceedingly rare. Source: Bloomberg Finance LP
The drop in COMEX silver inventories could signify a normalization of the situation on the exchange and the return of some metal to London. Source: Bloomberg Finance LP
Technical Snapshot
The price is retreating significantly today, falling not only below $50 per ounce but also breaching the 2011 peaks. Furthermore, the accelerated upward trend line, initiated in the second half of September, is being broken. Should this correction extend beyond a one-off profit-taking event, the next key support level will be around $47 per ounce, coinciding with the 30-day moving average.
Daily summary: Markets on Hold Ahead of Netflix Earnings
OpenAI threatens Google’s dominance. Alphabet shares under pressure.
UnitedHealth Invests in AI. Stock Price on the Rise!
⏬Gold loses more than 5%.
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.
