Oil prices surge to two-week winning streak as Iran supply fears grip markets
Good question, isn’t it? In yesterday’s analysis, I focused on how low can gold, silver, and miners decline, and today I’d like to focus on the rebound.
In short, the rebound is purely technical, nothing is really happening in the USD Index that would justify it.
The USD Index just paused, and in general it’s recovering from a severely oversold territory after invalidating its breakdown. In other words, it seems poised for further rallies.
Holding 100 Could Reshape Multiple Markets
And when it rallies and holds above 100 – it will be then, when the big moves in multiple markets start. At least that’s my take on it, as 100 is not just a very round number. It’s also where we have the rising, long-term support line which was briefly broken in the past – and each time the USD Index then rallied back above it. The 100 level is also just above the declining resistance line below on the 2025 highs.
Once this combination of resistance levels is taken out, the investors and traders will turn their head to the poor-old USD and recall that it’s actually the currency of the most powerful nation on the planet (with the biggest army and the biggest potential for the AI-led growth) that’s still most prominently used in the international trade.
There are myriads of factors that one can choose to focus on and emotions decide which get into the spotlight of consciousness. And technicals are a way to analyze those emotions and see when the tides shift. I think we’re on the verge.
Anyway, getting back to the precious metals sector, as yesterday, I’ll start with silver.
The white metal has a very strong support at $58 and I think it will bottom there. Taking into account this along with the tendency for markets to double their previous move after a correction, provides us with a specific possibility.
Namely, silver could rally to about $93-$94 and top there and then decline sharply once again – perhaps this would be triggered by another wave up in the USD.
This might be a good opportunity to adjust your positions.
Remember to diversify with bitcoin, which has just as bad (if not worse) situation.