Gold & Silver Review/Preview: Recent Performance, Fundamental Drivers, Lessons, & Playing US Jobs Reports

A guide for short term gold and silver traders, ideas on trading Friday’s key events, particularly the US non-farms payrolls, unemployment rate, and average hourly earnings.

Summary

-Gold and silver have been predictably tracking the USD over the past 24 hours.

-There are 2 big likely sources of volatility today, only one is likely to impact gold and silver, via its influence on the USD.

-Ideas on short term trading for gold and silver Friday.

In yesterday’s post we correctly predicted:

Gold’s outlook neutral to negative in the next 24-48 hours, with no significant news before Friday’s monthly US jobs reports.

ScreenHunter_02 May. 08 07.18

GOLD 4 HOUR CHART FOR MAY 7TH AND START OF MAY 8TH

KEY:10 PERIOD CANDLE EMA DARK BLUE, 20 PERIOD CANDLE EMA YELLOW, 50 PERIOD CANDLE EMA RED, 100 PERIOD CANDLE EMA LIGHT BLUE, 200 PERIOD CANDLE EMA VIOLET,DOUBLE BOLLINGER BANDS NORMAL 2 STANDARD DEVIATIONS GREEN, 1 STANDARD DEVIATION ORANGE.

Source: MetaQuotes Software Corp, www.FXGlobe.com

02 May. 08 07.18.jpg

Note the very tight trading range, ~1180 – 1188,  and overall drift lower over the course of Thursday, with the range tightening even more as the day wore on. We had precisely the same price action for silver.

ScreenHunter_03 May. 08 07.30

SILVER 4 HOUR CHART FOR MAY 7TH AND START OF MAY 8TH

KEY:10 PERIOD CANDLE EMA DARK BLUE, 20 PERIOD CANDLE EMA YELLOW, 50 PERIOD CANDLE EMA RED, 100 PERIOD CANDLE EMA LIGHT BLUE, 200 PERIOD CANDLE EMA VIOLET,DOUBLE BOLLINGER BANDS NORMAL 2 STANDARD DEVIATIONS GREEN, 1 STANDARD DEVIATION ORANGE.

Source: MetaQuotes Software Corp, www.FXGlobe.com

03 May. 08 07.30.jpg

The reason for the narrow trading ranges, again as predicted, was that the relatively weak set of scheduled events was unlikely to move precious metals. Given that gold and silver are moving in the opposite direction of USD rate speculation (rising rate hike expectations, rising USD, falling gold and silver, andvice versa) than anything else this week, caution ahead of today’s monthly US jobs reports was also a restraining factor.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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