Gold prices recover strongly, silver turns to an extremely optimistic state

Gold futures fell as much as $75 in the session, a significant decline that has many people worried about the possibility of maintaining the recent increase. Technical analysis shows the appearance of a three-river evening star candle model on the day chart - a signal of reversal to depreciation, often signaling weak stages.

However, bypassing these technical warnings, gold had regained more than half of its pre-closing levels, closing the session to just $23.8, or 0.54%. This recovery shows potential strength and demand is still supporting the precious metal at current prices.

Silver has a similar development to gold, going through a quick but short-term sell-off. The synchronization in price fluctuations of the two metals shows that the main cause comes from general market forces, instead of individual fundamental factors. Notably, most of the price declines were concentrated in about 90 minutes starting at 9:30 a.m. Eastern time, coinciding with the opening time of the New York market. This time suggests that selling power could be coordinated as soon as the US market opens, possibly by algorithmic trading systems or organizations adjusting their portfolios in response to important economic data.

The short period of decline but a quick recovery provides important clue about market sentiment and the nature of the decline. A quick recovery from a low during the day shows that the decline is mainly due to profit-taking, not a sign of a broad correction or a fundamental change in the outlook for precious metals. Investors who have accumulated positions in previous increases are likely to take advantage of high prices to make a profit, creating temporary selling pressure that quickly depletes as low buyers and trend traders enter.

This is especially evident in silver, when in the trading session on Tuesday, silver prices increased sharply, following the increase in the previous two sessions. This is a signal that purchasing power is still strong, and silver prices may continue to increase, despite reaching a record high.

The differentiation between the performance of gold and silver is becoming increasingly clear, becoming one of the most notable developments in the precious metals market today. Silver is moving from a state of very optimistic to extremely optimistic, with continuous buying pressure, strong technical models and profit-taking capabilities without losing the recent increase mark. Meanwhile, gold is starting to show signs of fatigue, making it difficult to maintain its upward momentum and easily under selling pressure during the day. The emergence of technical models that may be bearish combined with gold not fully recovering from the decline on Tuesday shows that the metal may enter the adjustment phase after impressive gains.

This is clearly demonstrated through the daily performance of the two metals, reflecting the change in momentum in the precious metal group. Silver rose $0.73, or 1.26%, to record a solid increase, while gold only fell slightly. Although the decline in gold was not large, the phase difference in the direction between the two metals is important both technically and fundamentally. Silver has recorded a significant increase in four consecutive sessions, setting many record highs and showing outstanding strength that surprised many investors.

The continuous superior performance of silver over gold is likely to attract more attention from investors, as the metal gradually separates from the "big brother" of gold. Historically, silver has fluctuated more strongly than gold, meaning higher risks but also greater profit potential for investors accepting wide price fluctuations. The current rally is attracting a new wave of investors, including those who have previously focused on gold.

Several factors may be supporting silver's remarkable rally. Industrial demand remains strong, thanks to the important role of silver in the production of solar panels, electronics and new technologies. In addition, the smaller size of the silver market than gold makes capital flows have a stronger impact on prices. The investment community seems to have realized the dual nature of silver - both an industrial metal and a store of value - creating an attractive basis for capital allocation, in the context of both high industrial demand and shelter demand.