Precious metal prices, like Gold, Silver, and Platinum, often oscillate between trending and cyclical phases, creating distinct opportunities and challenges for traders. Understanding these dynamics is crucial for aligning your strategy with the prevailing market environment. Here’s an in-depth look at how these phases operate and how traders can use them to their advantage.
Trending Phases
In trending phases, precious metal prices move in a clear and sustained direction—upward in bullish trends or downward in bearish trends. These movements are influenced by economic details, including:
- Interest Rates: Changes in central bank policies, such as rate hikes or cuts, directly impact precious metals, which are non-yielding assets.
- Macroeconomic Data: Inflation reports, employment data and GDP growth often set the tone for the metals market.
- Geopolitical Events: Global uncertainty, like wars or trade disputes, tends to favor safe-haven assets like gold.
While economic factors influence market sentiment, price movement ultimately depends on the underlying buying or selling action. These phases vary in sustainability and depending on the horizon of the trade, different metrics should be used to derive the outlook.
Cyclical Phases
Cyclical, or range-bound, phases occur when precious metal prices fluctuate between well-defined support and resistance levels. These phases often suggest a balance between buyers and sellers, leading to indecision in the market. Key characteristics of cyclical markets include:
- Repetitive Movements: Prices oscillate within a specific range, often without a clear direction.
- Market Consolidation: These periods are often precursors to a breakout in either direction.
- Neutral Bias: There is no strong preference for upward or downward movements, making directional strategies less effective.
Trading a trending strategy in a cyclical market can lead to losses, as the lack of directional momentum results in false signals. Instead, range-bound strategies are better suited for these phases.
Insights from the GSC Morning Call
At GSC Morning Call, we provide daily insights to help traders navigate these phases effectively. Our analysis includes:
- Identifying Market Phases: Determine whether the day’s price action is likely to be trending or cyclical.
- Defining Bias: Highlight the underlying bias within each phase to guide trading strategies.
- Support and Resistance Levels: Offer indicative levels for planning entries and exits, minimizing risk.
By combining these insights with broader trend analysis, traders can position themselves to capitalize on opportunities while mitigating risks.
Want to know more?
Contact us via email ([email protected]) or WhatsApp (+65 6222 9703) to receive actionable analysis that empowers your trading decisions. Let us help you navigate the complexities of trending and cyclical markets with confidence.
Gold pricing has been very illiquid and spreads have been widening to unprecedented levels for the past 2 days. We received news from various banks and liquidity providers that the volatility and subsequent spread widening are due to a breakdown in Exchange for Physical (EFP) gold. Accordingly, refineries are shutting down and market makers who had short EFP positions are being adversely affected. Currently the Gold futures market is in contango and the spot and futures prices have widen as much as $70 per oz on 24th March.
Point to note, there is no shortage of Gold in the market, just that at this point of time, demand overwhelms supply and the Gold supply chain is greatly affected due to measures announced by Governments to stem the threat of Covid-19 globally.
Read more:
https://www.reuters.com/article/us-gold-trading-cme-idUSKBN21B3GC
Suspension of Online purchases
Due to the recent huge volatility in Precious Metals prices and the influx of orders that have come in, we have temporarily suspended online checkout. This is to allow our team to ensure that the previous orders are all being accounted for and physical inventory are being allocated to these orders. As physical precious metals products are limited in our store, clients who visit us and fully pay for their precious metals purchases will get their physical precious metals or be allocated precious metals that we have secured and slated to arrive in the coming weeks.
Thank you for your kind understanding on this and will try our best to secure good premiums and inventory for our valued customers over the coming weeks.
Price of physical Silver decouples from Silver spot prices
Here at GoldSilver Central, we faced a huge increase in orders since the big selloff in financial & commodities markets on 6 March 2020. Silver prices fell to a low that was last seen 11 years ago. Demand for physical Silver soared globally and coupled with the effects of Covid-19, supply chains globally is affected. Many flights have been grounded or cancelled and many mints and refineries are at half strength due to government advisories to curb the community spread of Covid-19.
Physical premiums for coins went up to more than 250% and for bars it was way higher. The huge hike in premiums is unprecedented. In our 9 years in the Precious Metals trade, this is the 3rd squeeze we have experienced for silver but this is by far biggest challenge to Silver mints and refiners. For example, Perth Mint has just sent a notice to inform all dealers that silver sales has been suspended till further notice due to the backlog of orders due to the sudden influx of the sheer number of orders they have received recently.
Hence we have no choice but to raise the premiums on most of our products. Some of our products we have on hand are still at old premiums, like the Perth Mint 1kg coins so get it before it gets snapped up soon too!
However, do note that this doesn’t mean that the world is facing a shortage of Silver. The refineries have a daily limit on the number of products they can manufacture and when global demand way surpasses that, delivery schedule will delay. Silver, Gold and other Precious Metals have always been a price taker based on the Loco London prices. But this does not reflect the current physical demand that we are facing globally. Therefore we now see a decoupling of physical silver from the Loco London Silver prices. It will not make sense for miners to continue to mine for Precious Metals if prices go below their cost of mining so fundamentally, there is a downside cap for all precious metal prices.
Updates on Gold
As for Gold, GoldSilver Central has also faced an increase in demand too for Gold coins and bars but was not as drastic as the rush for Silver. Demand has increased for Gold way before the recent selloff and demand has picked up since the start of the year.
Premiums have increased too for Gold products but not much as silver, premiums for most gold products still did not increase above 100%.
We have just gotten some inventory of Gold bars in store and still have some inventory of the smaller gold bars and 1oz gold bars while stocks last!
Products clients can consider during this period of high premiums
During this period of increasing delivery time and high premiums, clients can consider other alternatives for buying into Precious Metals.
Firstly, you can look at the Perth Mint Certificate Program (PMCP). Clients can consider buying into the only Government Guaranteed accumulation program in the world. The cost above Perth Mint Precious Metal prices is only 2.25% for Gold, Silver & Platinum. Click here to learn more about PMCP!
Next, you can consider opening a GSC Live! account with us. This will allow you to lock in the precious metals prices for the metal that you wish to purchase and when premiums are back to normal, you can then decide to take delivery of the desired physical product that you were eyeing at the Loco London prices that you have locked in previously. Click here to learn more about GSC Live!
Thank you once again for your patience and understanding on the delays in our replies to emails, online chats and whatsapps and also for the long queues we have faced the past week. We always try to serve you to the best of our ability with as best prices as possible.
We have also secured some shipments in the coming weeks for silver (including some coins) and these will be open for preorders soon so stay tuned to our website and social media channels for latest updates!
Trading and investing are two different methods of gaining profits from a market and both activities involves market participation at the right time. Traders take advantage of market volatility by entering and exiting market to take frequent profits while investors generally buy and hold assets or financial instruments over an extended period of time. Of course the reverse is possible too. Timing and convenience became an important factor in building wealth. What if you can have access to the market right in the palm of your hands?
GSC Live! is the mighty platform with endless possibilities that offers users access to the Precious Metals market anytime of the day. Apple and Android supported which means you are able to trade Gold, Silver and Platinum on your mobile phone. Here are 3 reasons why you should try GSC Live! today.
- Convenience: Its user-friendly interface makes it easy to understand and operate. And because you can download the application, you can check and execute trades while you are having a meal, shopping for groceries or even while you are travelling abroad. Other features include setting pending orders that helps you manage your trades while you are asleep. You can even leave buy or sell limit orders and GSC Live! will auto execute your trade when your desired price is reached.
- Instant execution: GSC Live! is ready for you to place your trades and they will be executed instantaneously. Not to worry about the latency of the data as all spot prices are in real time. You can buy or sell Gold, Silver or Platinum at the price you want.
- Spot Deliverable: You will be able to take physical delivery of what you have traded. We are the first Spot deliverable, physically backed Gold, Silver and Platinum in Singapore. Simply contact the GSC Live! team and we will provide the information on how to.
If you are still unsure, a demo version is available for you here. Follow the easy steps and you will have a tool to access the Precious Metals market. Download and try GSC Live! today for free!
Published: 28 July 2016
- GoldSilver Central Pte Ltd (“GoldSilver Central’) officially launches GSC Live! on the widely popular MetaTrader 4 platform, providing investors with the ability to buy and sell their precious metals holdings anytime, in SGD or USD, based on the current spot prices with narrow spreads. MetaTrader 4 is an advanced leading online trading platform that enables investors to apply charting and analytical features and strategies to their investments. This platform is easily accessed via mobile or desktop applications.
- Designed to combine the power of accessibility, liquidity and convenience of buying and selling precious metals, GSC Live! aims to enable investors to take advantage of the opportunities in the frequent fluctuations of the precious metals prices during the London and New York trading hours. GSC Live! allows trading of physical precious metals including platinum, at real-time spot prices. A preview of its powerful features will be displayed during the GSC Live! Launch on 29 July 2016 at Kaiserhaus, Capitol Theatre. Annual audits are conducted to ensure that our customers’ holdings are physically backed.
- With GSC Live!, customers are able to purchase physical precious metals at low entry levels and narrow spreads. The minimum contract size in ounces for Gold and Platinum is 1/10oz (3.11g). For silver, investors are able to buy as little as 5oz (155.51g) instead of the available “mini” contract sizes of 1000oz.
- When customers decide for physical delivery, they are given the choice of London Bullion Market Association (LBMA) Good Delivery Gold, Silver and Platinum bars and coins. For example, after a customer purchases 1oz worth of Platinum on GSC Live!, they are given the option of taking home a Valcambi 1oz.
- Commenting on GSC Live!, Mr. Brian Lan Managing Director of GoldSilver Central says: “Physical precious metals have been a traditional asset class for generations. We at GoldSilver Central strive to bring the latest innovations, liquidity and accessibility for physical precious metals. Leveraging on advanced online trading technology, MetaTrader 4 (MT4) is our platform of choice as it combines the power of its advanced trading features and analytical capabilities and has been proven by use from active traders all over the world. Now, investors can trade physical precious metals from their smartphones or laptops on the GO. Precious metals will always remain as an important part of an investor’s investment portfolio. We hope that now with GSC Live!, more investors can have increased profitability when managing their precious metals investment portfolio especially in today’s uncertain economy.”
- Commenting on the announcement of GSC Live!, Albert Cheng, Chief Executive Officer of SBMA said: “It excites me to see our home-grown bullion dealer, GoldSilver Central introduce such an innovative platform that changes how precious metals is traditionally being traded. GSC Live!, with its 24 hours, 5 days a week live prices makes bullion trading easier and more convenient. This will assist to propel Singapore’s prominence as a major hub for precious metals trading and investment, in line with our vision for SBMA.”
ENDS
For media requests, please contact:
Beata Liew
Senior Branding & Marketing Executive
GoldSilver Central Pte. Ltd.
T: (65) 6222 9703
E: [email protected]
About GoldSilver Central
GoldSilver Central Pte Ltd, a Singapore registered company since 2011 specialises in physical bullion trading in gold, silver and platinum at real-time pricing, industry bullion supply, bullion buying and selling, collateral loan and secured storage under GoldSilver Central’s Bullion Storage Program at the Le Freeport.
It is backed by a management team and board of directors with strong financial expertise and experience in physical bullion investments. GoldSilver Central has been awarded Authorised Distributorship for Perth Mint products and also the Authorised Dealer for the Government Guaranteed Perth Mint Certificate Program. GoldSilver Central differentiates itself from its competitors with its full suite of integrated precious metals products and bullion services with a focus on making physical bullion investment accessible and liquid to the individual, at leading competitive rates.
GoldSilver Central is a current local associate corporate member of the Singapore Bullion Market Association (SBMA), formed in 1993 to support Singapore’s goal to be a physical bullion hub in Southeast Asia.
For further information, please visit www.goldsilvercentral.com.sg
Contact email: [email protected] | Tel : (65) 6222 9703
GoldSilver Central’s office is located at 18 Cross Street, China Square Central #01-24, Singapore 048423.
About the Singapore Bullion Market Association
The Singapore Bullion Market Association (SBMA) was formed in the early stages of Singapore as a bullion hub in 1993. Singapore’s innate attributes of neutrality, stability, excellent connectivity and reputation as an important centre of finance has long appealed to global traders in precious metals.
In 2012, with the lifting of the Goods and Services tax (GST) off Investment Precious Metals (IPM) by the Singapore government, this has since set in motion Singapore’s vision to be Asia’s global precious metal trade hub.
Today, the SBMA plays an essential role of connecting and promoting the Asian bullion market internationally. The association promotes transparency and governance in the Singapore bullion market and plays a pivotal role in market development in Singapore and beyond.
