Silver Outperforms Key Markets, Metals & Energy

While December was a horrible month for the broader markets, that wasn’t the case for the precious metals. As the Dow Jones and S&P 500 Indexes suffered the worst December since the Great Depression, the silver price enjoyed quite a healthy rally. The notion of rising precious metals prices during a market selloff ran counter to most analysts who forecasted falling asset values across the board.

However, that’s exactly what took place in December. I stated, since the beginning of 2018, that when the markets really started to decline the precious metals would likely disconnect and rally higher. Over the past month, the silver price jumped by 10% and gold 5%, while most of the broader indexes, base metals, and energy suffered declines.  

For example, the Dow Jones Index fell 9% since December 1st, even though it has rallied from its low on Christmas Eve:

At its low on Christmas Eve, the Dow Jones Index fell a stunning 16% in a little more than three weeks. Currently, the Dow is attempting to retest its 25 Day moving average (MA) and the 24,000 resistance level that I have shown in previous charts. If we look at the graph below, we can see that the Dow finally touched the 25 Day MA today:

It will be interesting to see what the Dow does tomorrow, but at some point, the broader markets will reverse and continue to sell off.

I must say, watching Intra-Day trading of the markets, stocks, metals, commodities, and energy has been quite eye-opening. Yes, I still follow the fundamentals as they are the true factors that guide the markets, but technical analysis provides us a “CRYSTAL BALL” on price trend movements. I will explain at the end of the article, but let’s look at the next following charts.

The oil price has also been falling along with the broader markets. Even though the U.S. West Texas Intermediate oil price peaked at the beginning of October, it dropped another 8% over the past month:

Now, it is quite amazing how the oil price also fell to its low along with the Dow Jones on Christmas Eve and then shot up higher the next trading day.  I will be explaining this in more detail in a new video update, but I believe the oil price will attempt to move back up to $52 before reversing lower.

Please note, these charts were done early today before the market close, so the metals and energy prices are reflective of Jan 7th (Monday) trading.

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