In the same category

Record Low Volatility in Precious Metals and What it Means

IMG Auteur
Published : March 13th, 2018
497 words - Reading time : 1 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Technical Analysis

The past 18 months have been difficult for precious metals investors. If you had known Donald Trump would be elected and the US Dollar would soon begin a nearly 15% decline, you would have expected Gold to blow past its 2016 high. You would have been shocked to see the gold miners and junior gold stocks trading lower. Gold has fared okay but the gold stocks and Silver have lagged. As US equities have continued to power higher, precious metals have struggled to perform while volatility in the space has dwindled. Precious metals volatility has reached extremely low levels and this is a sign that a major move, while not necessarily imminent is surely on the horizon.

We plot a weekly bar chart of Gold that includes a handful of volatility indicators such as the Gold Vix (GVZ), Average True Range (ATR) and several bollinger band widths (BBw). These indicators have touched major lows in recent months. The Gold Vix which began trading in 2010 recently touched its lowest level ever at 9. ATR recently touched its lowest level since 2007. The 40-week and 80-week BBw’s recently hit their lowest levels since 2005 while the 160-week BBw recently touched its lowest level since 2002.

24hGold - Record Low Volatilit...

Like Gold, Silver is showing significantly low levels of long-term volatility. Its ATR recently touched its lowest point since 2006. The BBw for three time frames (40 week, 80-week and 160-week) recently touched 14 year lows.

24hGold - Record Low Volatilit...

Although the gold stocks are one of the most naturally volatile markets, they too are showing significantly low long-term volatility. Below we plot the NYSE Gold Miners Index, which is the parent index of GDX along with similar volatility indicators. The ATR indicator recently touched a 15 year low. Interestingly, both the 40-week and 80-week BBw’s recently hit some of the lowest points of the past 25 years. The 40-week BBw recently tied 2007 for the lowest point in the past 25 years while the 80-week BBw recently touched a 6-year low and its 3rd lowest point of the past 25 years.

24hGold - Record Low Volatilit...

The major markets within the precious metals sector are showing extremely low levels of long-term volatility. At somepoint this will change but we cannot know exactly when. Given our long-term bullish bias, our thinking is volatility could increase as Gold approaches resistance and then accelerate upon a break-out in Gold. Note that low volatility can last for a while and will not suddenly change overnight. It may slowly start to increase at first. While we cannot know when, we do know that extremely low volatility is present and can facilitate a major move over the next 12 to 24 months. With more time ahead before an increase in volatility and a potential break-out we continue to remain patient and accumulate the juniors we think have 500% return potential over the next 18-24 months. To follow our guidance and learn our favorite juniors for the next 12-18 months, consider learning more about our service.

Jordan@TheDailyGold.com


|
Data and Statistics for these countries : Georgia | Jordan | All
Gold and Silver Prices for these countries : Georgia | Jordan | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection, as well as TheDailyGold Global, an add-on service for subscribers which covers global capital markets. He is also the author of the 2015 book, The Coming Renewal of Gold’s Secular Bull Market which is available for free. TheDailyGold.com was recently named one of the top 50 Investment Blogs by DailyReckoning and WalletHub.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
“Collapse Of Civilisation Is On The Horizon” – Attenborough Warns W...
11 DecJ.0
The Climate, it's complicated. Look up the 100,000 year problem. Basically, the Earth has been in an Ice Age about 70 - 80 % of the last one m...
“Collapse Of Civilisation Is On The Horizon” – Attenborough Warns W...
06 DecS W.0
It is difficult to argue with a person like D Attenborough. Who doesn't like his shows? In saying that I am wondering if he, and probably 99% o...
Columbia University Promotes Letting Students Grade Themselves
03 Decvictoriashores
Really who cares
Scientists: The Globe’s Food Supply System Is Broken
04 DecJ.
People need to stop following academics as if they know everything. Science is about continuously evolving your knowledge based on a process of te...
Scientists: The Globe’s Food Supply System Is Broken
02 DecS W.
Oh no! Wheeze all doomed. It is not a matter of eating less meat it is simply a matter of eating less. and eating less of garbage food in part...
How Private Banks Create Bubbles — with the Help of Central Banks
02 Decsneezy67
It appears that we as consumers pay a price for convenience. It is very difficult to haul 10 acres to market on your back or cart. Pieces of gold a...
Why It's Important to Define Money Correctly
29 NovACarr
Great quote!! This is incredibly true. Too many people get so caught up in fiat currency, when it's all about gold if you really look at it. I've g...
Thanksgiving - And Deliver Us From Evil
23 NovBarnsey
Dear Jesse, As much as I admire your journeys down biblical roads, I consider you have missed the point of that mystical journey. Beyond...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS