Yesterday gold swung from a low of $1141.70 to a high of $1221, a 6.9% intraday move. This was the biggest one-day move in gold since April 15, 2013.
Silver had an even bigger move than gold. Silver swung from a low of $14.15 to a high of $16.81, an 18.7% move. This was the biggest intraday move since May 8, 2012.
The prior big moves occurred on fundamental developments and in line with fundamental developments.
Please click here for an annotated chart of gold futures contract GCG5.
This time, it was very different. The fundamental development that I will explain later in this article was very negative but the moves in both gold and silver were to the upside. To the uninitiated, it may seem perverse that gold and silver rocketed to the upside on a major negative fundamental development, however this is quiet common as you will understand by the time you have absorbed this article.
These days it is popular to trade gold and silver using ETFs such as ETF (GLD) for gold and ETF (SLV) for silver, however, these ETFs do not trade overnight and thus mask the true moves in gold and silver. For this reason to understand short-term moves, it is best to look at the nearest month futures contract that is most active. At this time, the contract to consider is February 2015 that trades under the symbol GCG5 at the CME Group.
Let us start by looking at a 15 minute annotated chart of this gold futures contract…Read more at KITCO
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