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Gold And Silver To Skyrocket

By Andrew LaneCommoditiesNov 11, 2021 04:42AM ET
www.investing.com/analysis/gold-and-silver-to-skyrocket-200608044
Gold And Silver To Skyrocket
By Andrew Lane   |  Nov 11, 2021 04:42AM ET
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The news headlines and price action would imply that traders across the globe have finally accepted that inflation is running hot despite the best efforts by Powell to deceive; it isn’t transitory.

Yesterday we saw a rip-roaring 30-year high when the CPI was released. Unlike previous high numbers, gold and silver rallied. Gold sliced through the $1835/oz level like it wasn’t there, and silver briefly stuck its head above $25/oz before retracing slightly.

The big question now, is can this rally be sustained? The charts clearly show both have broken out of their near five-month consolidation period. This is highly bullish. Furthermore, yesterday’s rally occurred on the backdrop of a massive dollar rally and climbing yields which is all the more impressive.

The following major resistance levels for gold are $1920 and for silver $26. If we continue to see intraday dips bought aggressively, then this could have the legs to go a lot higher. We have also seen buying of strength instead, which is a clear sign of a bull market resumption.

There is a confluence of fundamentals favoring gold and silver at present. If the transitory narrative is rearview mirror stuff, gold and silver could be at the start of an absolute higher tear. How high? Well, this camp never makes price predictions because it is virtually irrelevant in such manipulated markets.

However, if we are to compare the rallies of the past in the metals in similar conditions (we could make an easy argument to say we haven’t even scratched the surface of the complex environment we find ourselves in today), then look at today’s prices and multiply gold by 3 and silver by 6.

Cycles have proven these metrics as a reasonably good guide. If we are looking at gold and silver’s inflation-adjusted prices, very similar metrics occur.

With taper announced, the stock markets in topping patterns, inflation on fire, low-interest rates, Basel III, and bank’s NSFR compliance a matter of weeks away, all fundamentals point higher. Yesterday and today, so far in the London session has shown that additional liquidity has poured in. The sleeping giants have just awoken for the next phase.

Gold And Silver To Skyrocket
 

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Gold And Silver To Skyrocket

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Comments (6)
Paolo Bertozzi
Paolo Bertozzi Nov 17, 2021 3:25AM ET
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Hi Andrew, what do you think about the explosion in open interests on gold during last two weeks (comex)? Printing more paper gold has had the effect of capping the price but it is the tactic banks used before smashing price. A lot better is the situation of silver. Thank you
Andrew Lane
Andrew Lane Nov 17, 2021 3:25AM ET
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Hi Paolo. Always a difficult one as I've never believed the stats that come out are accurate. However under normal circumstances, the price increasing, the volume increasing and open interest increasing would confirm the trend being higher.
Fabio falec
falec Nov 11, 2021 11:55AM ET
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Finally it is starting to pay off. I bought everything PMs related since last year. And incrementing at the bigs drops we have had. Keep stacking folks.
Scott Faries
Scott Faries Nov 11, 2021 11:19AM ET
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$1920 let's see it! Boom 💥
Peter BullMarket
Peter BullMarket Nov 11, 2021 8:30AM ET
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What a great article! Thank you
Nick Farr
Nick Farr Nov 11, 2021 6:35AM ET
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At last there is fire to rebirth the phoenix! Gold bulls will drive this upwards anyway, but to have so many markets on the back foot after months of inflation denial now seeking shelter...Well..Happy days indeed.Bullish trading time boys and girls!The tide looks to have turned in favour of reality.
Phatrachot Tohcartahp
Phatrachot Tohcartahp Nov 11, 2021 6:20AM ET
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Gold is more expensivr
 
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