UPDATE Gold and Silver Price Analysis August 2020 | Is the Rally Over?

by birtanpublished on October 3, 2020

We've seen some explosive moves in silver and gold uh over recent days in the space of what was it less than a week the price of silver reversed by about 20 the price of gold fell by about 10 from its new all-time highs so plenty of people are wondering well is this a buying opportunity or actually has the price gone too far in both these precious metals and now is the time to think about getting out it's been an incredible few weeks for the precious metals the main main ones silver

And gold we saw the price of silver go from about 18 an ounce early july to trade up near 30 uh first week of august and then probably reverse push back down so you can see the size of the moves pushing down uh towards the low 23s uh by the 12th of august if you have a look at the price of gold so the moves in gold from around where is it eighteen hundred dollars an ounce mid july punched out fresh all-time highs up at 2075

Then again this sharp reversal uh down towards 1860 by the second week of august and uh the question for both of these you can see the trend line here on gold this is just a buying opportunity now is this a great opportunity to get in uh or actually things are really changing so in this video i'll talk about both of these we'll come back and look at things in more detail and see if we can get some new trades on just as a quick reminder in that last video here's the positions closed

I did move the stop uh on goal to take profits at two thousand and twenty dollars if it fell to there so in hindsight that looks like a a pretty good move but i'm now left with no positions in gold or silver so we'll see if we can rectify that as well hello i'm david jones from capital.com and i thought given the volatility as you saw there in gold and silver uh over the last week and a half or so well let's do a quick update on um just what's going on and whether this is

Actually a buying opportunity for these these precious metals if you've missed out on the move before or want to add to the position or actually is it time to dump them because uh the trend is over so as usual in this video i'll talk about what's been going on uh we'll jump on the charts look at whether there's a trade there if you're watching and um you haven't subscribed if you could click on subscribe it does help support the channel

It means we can push out lots of timely uh and hopefully interesting content like this over the weeks ahead let's kick things off with gold so 6th of august the price of gold hit an all-time high of 2075 the previous all-time high was around 1920 so it blasted uh clean through that one one of the reasons fueling the rise in gold in recent weeks you know has been in ongoing investor concern about the state of the world economy even as we came out of

Lockdowns although stock markets still going up and are still strong clearly you know enough investors were worried about what could happen to push the price of precious metals higher but i think also driving this as i said last time around you know is everyone just getting too bullish and we put a video out a few days uh before prices really reversed and i just thought is sentiment getting too much of an extreme there was an element i think of um

Fear of missing out fomo driving the market higher you know people seeing the price rising higher and higher every day thinking this is free money piling in and when you get extremes and sentiment it is not unusual to see um an extremely vicious reversal as well and i think that's what we've gone through in gold and silver over the last few days so the price dropped back to uh 1860 by the 12th uh of august so we'd reversed um what's that about 10 um off those highs so we're pretty sharp turnaround and as usual the question is

As ever down here is it a buying opportunity are we going to see the trend resume and another attack on those recently set all-time highs when it comes to levels to watch i think 2000 is an obvious psychological hurdle after that 2075 is another obvious one the previous all-time high on the downside the recent low 1 860 and then just the other side of 1 800. but let's put some color on these numbers let's look at the charts and see what the trade could be so let's take a quick look at gold so here's our

Here's our favorite trend view on goals off those august lows 2018 lows i should say the longer term recovery trend in gold that that trend line coming in around about 1460 at the moment not too relevant to be honest to where the price is trading now and the price is uh almost 500 above that trend line but what is a bit more relevant it's what's been going on since those march lows so let's zoom into that and i think this trend is really

Important this this march lows off the march lows i should say it's done a great job on the way up and if we look at the panic selloff or the sharp reversal we've seen it's still above that trend line so actually to me this looks like a buying opportunity if we looked at the rsi down here the market did go you know pretty overbought uh from july onwards third week of july onwards but as i often say in strong trending markets it's not unusual to see uh rsi's move to an extreme we've had that

It's definitely been knocked out of the extreme since then so for me i want to be a buyer uh down here i think the closest i'd want my stop is the other side of that 12th of august low only yesterday's low at the time recording down at 1860 but about 70 away from where we are now perhaps a bit more of a relaxed stop is in this area down here let's flip this to an hourly so we had the old highs there were a bit of a barrier for a while uh in early

July oh the old highs from early july i should say from 8th of july through to the 21st of july 1820 was something of a barrier so what i'm going to do i'm going to be a buyer of gold now i could put my stop under the most recent low 1860 but actually i'm going to go 1800 so i'm a buyer where the price is trading now with a stop under 1800 looking for at least a run back up to those old highs at 2075 if that happens i look to move the stop

Let's get the trade on so i'm ready to go i'm buying two of gold where the price is now just above 1935. with a stop at 1800 which for me that seems a reasonable stop and uh for our usual risk of a couple of hundred pounds let's uh let's send that trade through and i think if the market does lose 1800 there's a risk we're just gonna drift back you know to where it was perhaps mid-june so i do think you know we've got we definitely got worries about that that um

March trend if 1800 is lost but for now i'm looking for it to hold and for a bit of normality to resume perhaps we're not going to see a re-test of all-time highs in the very short term but i think it's a it's a reasonable entry point based on what we've seen in gold over the last few days so we saw seven year high for silver on the 6th of august when it traded up to 29.85 and you know another thing fueling the rise of silver had been your hope that industrial

Demand would pick up after lockdown was eased after the economy got somewhere back to a new normal and manufacturing got got back into gear but as with gold there was a lot of hype about the rise in silver so i think again we have the fomo factor the fear of missing out higher prices driving more buying we reach an extreme in sentiment and then bang we get this this sharp reversal so silver's gone from 29.85 down to the

Recent low around 23.35 um so what's that a 20 turn around in very short order for the price of silver as with gold the question is down here okay is this now a bargain should we be uh looking to buy in or actually uh that's it the move for silver is over for now and we go back to more normal markets let's look at the levels to watch so the really obvious level for silver is that previous high 29.85 set earlier in the month and then below

That i think 27.50 that sort of area we've got lots of levels left on the downside the most recent one the obvious one is the low at 23.35 but um enough talk let's take a look at the charts and see if there's a trade so here's our silver chart again picking up on that old trend from march so the lows from march i've got a 20-day moving average uh on here you can see it did an okay job on the way up it's interesting that just yesterday it blipped below the 20-day moving average but it has

Recovered suggesting the trend is still okay the rsi we did have um bearish divergence on this rsi at those recent highs where the market was making new highs the rsi was falling can be a suggestion that the market is running out of momentum and that definitely has been the case clearly gold silver sorry is a lot more volatile than gold so i think when it comes to stop losses we probably need to give it a bit more room but let's just um zoom in that trend at the moment

Is coming in let's say twenty dollars so i think for me as long as gold robert silva sorry remains above twenty dollars an ounce uh that trend off those march lows is still intact um but perhaps we've seen the low already so if we're waiting for 20 we might miss out on the rise so bearing that in mind let me just focus on maybe what's been going on since july so if i'm going to treat this 20 fall from the highs as a buying opportunity the closest i'd want my stop

Is the other side of the recent low for me personally so the other side of 23.35 perhaps i give it a bit more room because we saw that 22 ish was good support for the market so i might go i'm gonna go 21.80 for a stop which is which is quite wide it's five dollars away almost from where the market's trading now but this is a very volatile market so um if it runs back up to those old highs i'll move the stop but 21.80 stop let's get the trade on so i'm going to buy 60 where the price is trading now

Above 26.40 and i'm going to put a stop in at 21.80 we'll review that if the price uh moves significantly by the time we do the next video let's let's send that trade through so for now at least i'm definitely in the camp of this is uh just a bit of a knee-jerk sell-off after some extreme extreme moves and i'm looking for these markets to crawl their way back up to where they were before here are the trades i just did down here at the bottom um gold buying in at 1934 and a bit

Silver buying in at 26.41 we'll see how these turn out and as usual uh we'll do a regular update so make sure you're subscribed and we'll see if these trades need to be altered so it has been something of an explosive move uh to august for the price of both silver and gold i think we might see things calm down in a bit more normality from now on but we'll see what the next few weeks brings but from me david jones and capital.com we'll wrap things up there thanks for watching and

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