iShares Silver Trust Pulls Back to Old Resistance
The coronavirus selloff has hammered almost every corner of the market, aside from precious metals. Most attention has focused on
XAUUSD
and
GDX
. But
XAGUSD
has also been on the move.
Each share of
SLV
controls one ounce of the white metal. It jumped above recent resistance in the $17 - $17.20 area last week, only to pull back and test the same price zone today. That level can now be useful for risk management.
The longer-term chart of silver is extremely volatile, although one thing is clear: It's historically inexpensive relative to gold. TradeStation data shows that the gold/silver ratio is now around 90 times, near the high of the century. Generally, silver lags gold early in the cycle and then outperforms as investors pile into precious metals. Will that older pattern return?
Finally, traders may want to remember why gold just hit new 52-week highs. The cause is not only risk aversion but also low interest rates from global central banks. That was true before the outbreak and now coronavirus only adds to the situation.
XAUUSD
and
GDX
. But
XAGUSD
has also been on the move. Each share of
SLV
controls one ounce of the white metal. It jumped above recent resistance in the $17 - $17.20 area last week, only to pull back and test the same price zone today. That level can now be useful for risk management. The longer-term chart of silver is extremely volatile, although one thing is clear: It's historically inexpensive relative to gold. TradeStation data shows that the gold/silver ratio is now around 90 times, near the high of the century. Generally, silver lags gold early in the cycle and then outperforms as investors pile into precious metals. Will that older pattern return?
Finally, traders may want to remember why gold just hit new 52-week highs. The cause is not only risk aversion but also low interest rates from global central banks. That was true before the outbreak and now coronavirus only adds to the situation.
