Gold and Silver have been on a big rally.
You might think the recent performance is not such a big deal when you look at the sort of rallies that Tesla, Nvidia etc can pull, but for a precious metal these rallies are prodigious.
When I first started writing here on Gold I predicted $3500 as the target, then when it start to move I thought $4500 was the destination and now who would say Gold won’t hit $5000. Here is a chart for that idea.
Likewise Silver, which came late to the party is already about $50 and if the rally continues $100 will be a clear price magnet especially with retail interest frothing up.
Silver follows Gold but when it runs it can run a lot further.
For me the whole thesis is underpinned by my mantra ‘Gold is for War,’ so its not a happy situation to expect Gold at $4500-$5000 an ounce and if Gold is a ‘canary in the gold mine’ for geopolitical stress as I believe two things are apparent. Tension is going to increase, but it also if begs the question that if tension is going to be tightening for months perhaps years to come, where does Gold get to then?
In the model that has worked so well so far, Bitcoin is the early, early, warning as ‘Bitcoin is for flight’ and it was almost a relief to see it dive from the top of its established channel by $2000 a coin in a few minutes a couple of hours ago. With the precious metals and Crypto so hot, its not a great sign for global stability and if all three rally hard it’s a scary situation.
This chart shows the Bitcoin set up. There is a sideways range and when its broken the move will be big. Approaching storms spike BTC up and when they pass it falls back. The Bitcoin chart is strong for sure, but I am not a bull. However Im not sat in Washington, Bejing or Moscow so its not done to me.
However worrying the performance and projection of precious metals prices is, if you believe ‘Gold is for War,’ we can pass all this bullishness off to other factors. The US government shutdown, even while its more of a killer headline rather than an earth shattering economic disrupter, it is still the kind of event that will make people head for haven assets. Meanwhile the US treasury is sure to be flushing the system with cash, which will in turn flush into the hot market assets of the moment, which in this case is Bitcoin and precious metals, sending them higher.
Then there is FOMO, the curse of the retail investor, often dooming them to short term joy and long-term pain. Gold and Silver are in early FOMO territory now. Thought its not exactly setting the interwebs alight. As such with FOMO only starting it would seem there is upside for Gold and even more for Silver.
Platinum and Palladium will follow on and have the most upside but are nonetheless followers for what Gold and Silver will do.
As a contrarian, will so uch bullishness on show, I start to worry the end of the rally is nigh, but if the underlying idea of ‘Gold is for War’ holds true, we’ve a long way to go.