The technical correction in gold and silver is over. Chances of a medium term bottom formation is very high. Risks to my bullish view are (a) Sharp rise in global bond yields. (b) US dollar Index trading over 95.50. (c) A deal between US lawmakers over the next economic relief package. (d) Vaccine made in the USA. A vaccine approved by the US, FDA will be more devastating for gold bulls than the Russian vaccine launched this week.
Overall trend is still bullish. US presidential election drama will fuel the next big rally for gold and silver. Media has already made Joe Biden and Kamala Harris as the next duo to lead the USA. Trump has already been declared a sour loser by the media. Trump and his handling of Covid crisis in February is the key reason why the USA and world is facing a surge in covid infections. Trump’s inept handling of covid crises makes Americans look for alternatives. Biden is the only choice for Americans unlike Indians where we have unlimited choices. The mudslinging, unearthing of past scams etc which unravels and travels with US presidential elections will ensure that gold and silver will rise. The pace of rise of gold and silver will vary.
Today and tomorrow there is big data. It can temporarily impact gold and silver. China and its thawed relations with most NATO nations and India will also support gold and silver prices.
Most people still prefer gold over silver as an investment. The April to August rally in silver has resulted in silver creating more awareness worldwide. People are looking at silver as an investment. People used to look at gold as a safe haven. People used to look at silver as a cheaper alternative to gold. People now perceive that Silver is no more a cheap cousin of gold. Silver has changed all the negative perceptions of the last decade. The next decade till 2030 will be more of a silver time than gold time. Hyper rich and elite who sulk at investing in silver should invest in platinum futures, buy far dated platinum call options and even purchase platinum jewelry. Silver will soon be the rhodium of 2019-2020.
COMEX SILVER SEPTEMBER 2020 – current price $2598.00
- Silver needs to trade over $2530-$2560 zone to rise to $2889.
- Crash will be there if silver trades below $2530.
- There can be very sharp two way price moves in silver.
NYMEX CRUDE OIL (September) - current price $42.67
- Crude oil can rise to $45.10 as long as it trades over $41.60.
- Crash will be there if crude oil trades below $41.60 today.
- Use a buy on dips strategy with a stop loss below $39.60 for the short term.
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