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Make It or Break It for Gold and Silver

gold bars on  dollar bills

Gold and Silver Investment Outlook Post-Fed Rate Cut

 

The Fed has ended its tight monetary policy with a 50 bp cut yesterday. This can only be good for Gold and Silver going forward. However, stocks may be less fortunate. While equities can continue to higher highs, history shows that when an easing monetary cycle begins, it does not bode well for stocks. In summary, the big picture remains firmly up in precious metals, but the risk of a stock market crash has increased—it’s only a question of when. The 2-Year/10-Year yield curve has just turned positive again. If 2019, 2006, and 1999 taught us anything, such a move in the yield curve signals that a crash in equities is not long to follow.

 

Short-Term Gold and Silver Price Movements

Back to the short term…

Silver is playing yo-yo now between $30 and $31.60:

Gold and Silver Investment

The 4-Hour chart shows a crystal clear negatively divergent higher high in Silver, when Silver is also extreme bullish and the Banks desperately want to get out of their short positions.

Gold and Silver Investment

That said, we must respect the trend, which remains firmly UP.

In summary, if Silver breaks $31.60, just buy, imho. However, the risk of a short-term drop to as much as ~$29.50 remains. If it gets there, I plan to buy. However, if it falls below $29.50, then look out below—and place a tight stop below there.

 

Gold and Silver Buying Opportunities and Strategy

Gold is even simpler than Silver.

Gold and Silver Investment

The key support level in Gold is $2540-$2560. If that holds, Gold could continue to $2700 next. But it too is extremely bullish, overbought, and negatively divergent on the 4-Hour chart. The Banks want to get out of their shorts in Gold too. Last but not least, Gold is in a bear flag pattern, which suggests it is overdue a correction sooner or later.

As in Silver, support at $2540-$2560 is a buying opportunity with a target of $2700 next, but place a tight stop below $2540.

 

Precious Metals Market Conclusion

The big picture remains clearly up. Any pullbacks should be bought, imho. But keep an eye on the stock market, because if and when it dumps, the metals are likely to suffer a sharp but brief drop. Don’t be surprised by it, but I will certainly be buying that dip. Until then, as you were. Upward and onwards, short-term corrections aside.

Buy gold bars and silver bars today to secure your investment and leverage market trends.

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

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About the Author

David Brady has worked for major banks and corporate multinationals in Europe and the U.S. He has close to thirty years of experience managing multi-billion dollar portfolios including foreign currency, cash, bonds, equities, and commodities. David is also a CFA charter holder since 2004.

Using his extensive experience, he developed his own process utilizing multiple tools such as fundamental analysis, inter-market analysis, positioning, Elliott Wave Theory, sentiment, classical technical analysis, and trends. This approach has improved his forecasting capability, especially when they all point in the same direction.

His track record in forecasting Gold and Silver prices since has made him one of the top analysts in the precious metals sector, widely followed on Twitter and a regular contributor to the Sprott Money Blog.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.