Why go long gold and short silver?

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地平线全球策略2026/10/20 16:37

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Gold is in a downward channel but remains in a bullish structure (still supported by the previously given white upward trendline). The bullishness in gold should be considered together with the bearishness in silver, or, more precisely, in conjunction with the trading logic of Little Yellow and Little E in alternative assets to gain a clearer understanding.

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CMX Gold (Daily Chart, as of 261018)

This is a rather interesting phenomenon, that is,in both markets, a trading structure with expanding spreads between liquidity proxies and risk proxies has emerged.Simply put,on the macro level, gold and Little Yellow—assets more directly influenced by monetary attributes and liquidity—have continuously outperformed the more risk-oriented silver and Little E over the past two weeks of trading.

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Gold Basket (Daily Chart, as of 261018)

The domestic goldBasketis also in a downward channel, maintaining a short position. Oftentimes, the Basket trend in the stock market is smoother and clearer than the trend of the commodity itself.

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Since we opened short positions, silver has already fallen by over ~10% and continues to move along the descending channel as expected. After turning bearish within the downward channel, the market naturally develops in this way. Meanwhile, the silver/gold ratio has weakened as expected, accompanied by a decline in precious metal prices—just as discussed earlier, without confirmation and sentiment support from silver, it is difficult for gold to sustain a rally.Pay attention to price structure, but also cross-asset confirmation. This is key to macro trading.

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CMX Silver (Daily Chart, as of 261018)

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Silver/Gold Ratio (Daily Chart, as of 261018)

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Palladium is the weakest among precious metals, as discussed in previous weekly reports. Given the number of new readers recently, I want to reiterate my definition of aleader: A leader is a micro target among comparable assets that takes the lead in both 1/ volatility amplitude and 2/ timing of structural shifts in the same direction.1/volatility amplitude,2/timing of structural transition—both ahead of peers in the given direction.

In simpler terms, when the entire precious metals sector is in an uptrend (ascending channel), the first asset to shift from a bearish to a bullish structure, or from a downward channel to an upward channel, while also leading in volatility amplitude, is the leader of the upward movement; conversely, the leading asset in a downtrend is the leader of the downward movement.

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NMX Platinum (Daily Chart, as of 261018)

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NMX Palladium (Daily Chart, as of 261018)

In this round of sell-off, palladium is clearly the leader of the downward movement. After anomalous action was detected last week, the leader triggered anAriston Bottomsignal on Thursday’s trading—a potential sign that the downtrend will end “ahead” as well.

Key focus for next week’s trading:1/Whether palladium can break through its bearishPTand switch to a bullish structure.2/Other precious metals—especially whether the silver/gold ratio can follow, searching for a bottom. These two points are the most important signals for friends interested in trading precious metals.

“The bottom is a weak bottom, because on the fractal level, lower highs and lower lows have appeared, so we will first enter a downward pause, and there won’t be an immediate right-side movement.”

——《 ARI’s WEEKLY WRAP 261011》

However,as a weak bottom, a right-hand rally will at least need to wait until entering the Ariston upward channel. There’s no need to rush the gun, it’s better suited for closing short positions.

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CMX Copper (Daily Chart, as of 261018)

Copper: price continues to rise, while momentum continues to weaken. Our system issued a top signal on26.09.22which still marks the peak of this rally.Currently still holding short.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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