With gold having poked through 4000 and silver through 50, we are obviously at a point with a lot of energy infused into the situation. Gold is way beyond all time highs at a significant round number and silver is back to the historic “Hunt Brothers” and 2011 highs.
Silver has led the most recent phase of the precious metals rally, so let’s focus on it. I am certainly not calling any sort of top here, but I am considering a scenario where silver pulls back from somewhere not to far above 50 in order to shake out the public. But it will be important to remember that the more times an important resistance area is tested, the weaker it tends to become.
I think that if it does not happen imminently, a push through 50 that holds is in the not too distant future. But in the near-term and for the sake of argument (and preparedness), if silver were to pull back from the 50 area, I’ve plotted a sharp pullback point to the convergence of visual support, the rising 50 day moving average and the 38% Fibonacci retrace level (measured from the April low). In other words, the 41-42 zone.
Again, I don’t want to scare anyone out of a position that is intended to be an investment. But I do want to make note of a possibility. It would be classic to run retail because “OMG, it’s the resistance at 50 again!”… but I think silver is going to leave that in the dust to the upside eventually.
Awesome Gary thanks. The other side and I think you alluded to it; It’s important at this stage to suppress any fears of heights.
Absolutely, Jim. The entire PM complex is like a slingshot on the bigger picture.
Future price dips 2-3 bucks below spot. You don’t see that often. Will spot move to future price, or the other way around?
I don’t know, but if you comp the silver miners (SIL) to silver they have pulled back hard. The trend is fine but it could indicate more pressure on silver.