Traders Turn to Precious Metals Among Volatility

Investor uncertainty and rising levels of volatility have dominated the public markets over the past couple weeks. As investors scramble for safety, traditional safe-haven assets such as the U.S. dollar, precious metals and other commodities have started to rise. Based on the charts of popular precious metal exchange-traded funds (ETFs), which currently offer some of the best risk/rewardsetups anywhere in the public market, we have tried to identify pockets of strength that traders can use to their advantage over the days and weeks ahead. (For a quick refresher, check out: 3 ETFs for Trading the Spike in Volatility.)

Gold

Sharply falling equity prices over the past several trading sessions have many retail investors eyeing the exit. From a technical analysis perspective, the timing of this move couldn’t be more interesting given the long-term ascending triangle that has been forming on the chart of the SPDR Gold Shares ETF . This pattern is one of the most common consolidation patterns, and the defined entry point makes it one of the most predictable. Given the position within the pattern and the significant declines in recent days, most traders will anticipate a break beyond the support of the dotted trendline. Given the height of the pattern, target prices will likely be set near $150, while stop-loss orders will be placed below the 50-week or 200-week moving averages to protect against a sudden sell-off. (For further reading, check out: Gold May Jump Over 20% as Investors Eye Inflation.)

While the equity markets shed most of the gains made so far in 2018, the precious metals market looks poised to move higher. …read more

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Category: GLD, SLV, PPLT

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