Caveat: Seasonal averages go negative in the March time frame. Caveat to the caveat: It’s an average of 30 years and can deviate on any given year.
Caveat: The mess in Ukraine is adding an element that in my opinion cheapens the case for gold and adds a lot of noise, because it forces fear-driven people into the metal when gold was already bullish on its big picture. Caveat to the caveat: As we reviewed recently, gold secular bull market began amid the terror, angst and hatred of the period that had 9/11/01 as its flashpoint.
Gold (daily) is holding above the bull gateway at 1920. It’s overbought by RSI. Since it poked through 1920 and reversed downward it’s been an up and down affair. Overbought is not a reason to get bearish. It is a reason to expect some grind or volatility until it is worked off. But here is a fact: at this time gold is above the 1920 gateway that we have established as the key to the next leg of the bull market. So far it has, and thus is bullish.
Gold (weekly) shows the context of the long consolidation handle from mid-2020, the holds of key support levels and now an attempt to break the consolidation. Taken in a vacuum (with no noise about what we think we know seasonally, in the media, etc.) it is bullish.
Gold (monthly) shows a picture asking why on earth gold bugs got so upset about a little handle on a giant Cup that is bullish. The play is today as it was in summer 2020 for gold to work off the 2020 sentiment sludge and then go about its longer-term target of 3000+. It appears on track.
Silver (daily) took out the initial resistance at and above the SMA 200 and is now eyeballing the 25.90 area resistance. Each of the yellow shaded areas would be keys to setting silver about a next leg up. It’s working on the November high now. RSI is overbought to the degree that has ended previous rallies, but when it will be time it will be time and if it is time, an o/b RSI will not stop it. But let’s prepare for some grinding at least, in the short-term.
Silver (weekly) appears to have an RSI and MACD that are capable of getting the job done as neither are overbought and RSI sits above its EMA 20 with MACD triggered up. Take out the 25.90 to 26 area and things get interesting.
Silver (monthly) shows how interesting it could get. The 26 area is also long-term resistance. Take that out and silver should be a magnet (with time and patience) to 35. Longer-term and pending the macro inflation/deflation backdrop, we’d look for 50 and beyond. But that is not yet a target I have confidence in as I do gold 3000+.