In that they are rallying with the broad global macro, gold and silver – along with the miners – are still nothing special. I expect them to be special in 2023, and that is why we micromanage them. But for now, let’s just get a snapshot of the metals and their all important ratio.
The gold price (futures) has used former resistance, now support at 1920, to bump higher. The implication by daily chart is to tick a new high above the March, 2022 high, which would also test the all time high of 2089 from 2020. I would like to see a new high of some kind before the next correction, because that would act as a sentinel for future bullish activity (long-term target is above 3000).
Silver is bumping its head against the resistance we’ve been noting. If it is able to break through the implication here would also be a new high above the March, 2022 high. All time highs are up around 50, so forget that for the time being.
The cool thing here is that if silver is only just preparing a move after this 2 month consolidation, the chart has reset nicely from overbought to not at all overbought. RSI and MACD are each still positive (50+ and 0+, respectively) after grinding downward.
Since the precious metals are rallying with the wider macro, it would be best with respect to an extended rally, for the Gold/Silver ratio (GSR) to break down because there are a lot of inflation bugs and China/India love and wedding season bugs and other bugs happily touting along while conveniently ignoring the fact that the precious metals are a leader to a very broad asset market rally. You know, the asset markets (esp. stocks) that most gold bugs despise.
Point being, the GSR has not broken down. It is pulling back on the concept of “Fed relief” that we’ve been discussing for months now. In my opinion, the broad rally – and likely this phase of the gold/gold stock bull – will be tied at the hip, to a degree. Ending phases would likely be indicated by a rise in the GSR and stabilization at least, in the USD.
So for now, party on Garth. But understand that we are probably in the final phases of the initial launch to much higher levels in the metals and miners later on. It’s all part of the Q4-Q1 rally projection from last November.
