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Gold And Silver Break At Last

By Andrew LaneCommoditiesMay 06, 2021 12:44PM ET
www.investing.com/analysis/gold-and-silver-break-at-last-200578097
Gold And Silver Break At Last
By Andrew Lane   |  May 06, 2021 12:44PM ET
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Gold has finally broken through the $1,800 barrier and in doing so has opened up the path to much higher prices.
 
As I reported a few weeks ago when the chart pattern informed us, gold had double bottomed amid a long-term chart resistance level. The bears couldn’t push it further down, and longs came in to far outnumber the shorts. Gold has been in a very frustrating nine-month downtrend in a larger bull market. This pattern now confirms the breakout to the upside and would imply there is a lot of room to move.

The chart below shows a series of major resistance levels to overcome by the time we can go aiming for the all-time highs. While I fully expect gold to pass these, it will be a bumpy ride along the way. The trend tells us that pullbacks should be buying opportunities now as the way the trend has changed since the start of April has confirmed the bull run is back on.

Gold daily chart
Gold daily chart


Silver’s pattern is similar to gold in many ways, however, during this nine-month frustration period, it has been far the strongest of the two, with the price having tested the August highs of last year during the silver squeeze in February. While Silver has one or two resistance levels to overcome, there is no doubt the major barrier is breaking $30 and closing the week above this level. We could see an explosion in price if this occurs very quickly after this, as major players cover their shorts. I’ve previously written about palladium and how that price was smashed down for years by the big players, and I’ve no doubt given the recent attention that silver has had, it will follow and I still believe all time-highs are possible in 2021.
 
Copper, platinum and palladium are all at multi-year highs. Gold has followed a near perfect Fibonacci retracement against the backdrop of the cup and handle formation shown on a daily chart. Silver always comes late to the party and puts in an explosive run following gold higher. History has shown that, and there is little to suggest this time will be any different.
 
It would appear the aforementioned metals have led the way in the reflation trade, and they always lead the way as barometers of inflation. It would appear now that traders are starting to turn their head in disbelief against the narrative of the Fed’s “transitory” explanation, and put their money into what has been an inflation hedge since the dawn of money – gold and silver.  The fundamentals are stronger than ever for the monetary metals to catch the front running pack and win the marathon by some distance in the next few years. 

Gold And Silver Break At Last
 

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Gold And Silver Break At Last

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Comments (4)
Paolo Bertozzi
Paolo Bertozzi May 07, 2021 2:04AM ET
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a question: OI are exploding but call/put ratio i widely over 3 ... are in comex call used to protect a naked short?
Andrew Lane
Andrew Lane May 07, 2021 2:04AM ET
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Quite possibly. Could be many other reasons as well.
Paolo Bertozzi
Paolo Bertozzi May 07, 2021 2:02AM ET
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storm of new Open interests (silver +11k)... probably banks keep trying their game. when we will see the covering price will raise and OI will fall... not now
Felipe Daniel
Felipe Daniel May 06, 2021 6:49PM ET
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Gold to $1900 by July it will be when infra pork plan from Biden will pass.
Tyrone Jackson
Tyrone Jackson May 06, 2021 4:50PM ET
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Let’s go !
 
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