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Gold Re-Testing 2013 Lows By Closer Margin Than Silver

Published 01/01/2014, 12:21 AM
XAU/USD
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GC
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SI
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Some interesting price action in the metals yesterday that I thought was worth noting.

First is the volatility. This is likely due to the fact that since yesterday was New Year's Eve, markets were much thinner in volume and thus easier to arbitrarily push around. The chart below, an hourly chart of gold, illustrates.
<span class=XAU/USD Hourly" title="XAU/USD Hourly" height="683" width="1278">
Gold did come within $1 -- or about 0.0847% -- of touching its 2013 lows. Defending these lows is vital for bulls, in my opinion, otherwise I think we could be on the way to $1050.
<span class=XAU/USD Monthly" title="XAU/USD Monthly" height="683" width="1278">
Silver, on the other hand, came within $0.32 of its lows, or about 1.7279%. In other words, silver did not re-test its lows by as much. The gold/silver ratio has been declining since the start of December, and judging by yesterday's price action, it seems as though this trend is continuing. Does this mean there is still time left on a short gold/long silver trade?

Here is a monthly chart of silver:
<span class=XAU/USD Monthly" title="XAU/USD Monthly" height="683" width="1278">
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