Precious metals remain in focus, with huge falls seen everywhere except in Gold, where the drop remained moderate.
- Eyes are on precious metals today as we already see wild gyrations in this asset class, potentially signifying the end of the recent extremely strong bullish trend:
- Silver fell by almost 10%, with the spot metal trading near $70 at one point. During today’s Asian session, we have seen a meaningful rebound to the $75 area.
- Platinum made a huge drop yesterday, giving up Friday’s outsized gains. We also see a minor recovery here.
- Palladium made an absolutely massive drop yesterday, reversing last Friday’s wild rise. We also see a minor recovery here
- Gold fell by an amount roughly equal to three times its long-term average true range but is now recovering nicely after this low held. I think this is the only precious metal where institutional and long-term long trades will have survived.
- These huge drops show that it is wise to respect huge increases in volatility when they happen. What soars higher, is also likely to crash lower.
- In the Forex market, since today’s Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest has been the Swiss Franc, although the market is relatively quiet as we approach the New Year holiday. The USD/MXN currency pair and the USD/ZAR currency pair are near their respective long-term low prices.
- There will be a release of the most recent US FOMC meeting minutes later today.
- It is likely to be a low liquidity week, with public holidays in most countries on Thursday and in some countries on Wednesday.
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Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
