Silver Will Lead the Way Up

DAILY SILVER PRICE:

Silver got hit much harder than Gold, as can be seen on the Gold:Silver ratio. The RSI and MACD Line in Silver are extreme oversold on the daily chart. The MACD Histogram is already turning up. Silver is getting ready to run higher, imho. 

Using a simple ABC count from the peak of $32.75, the targets on the downside for the low are as follows:

In a proverbial nutshell, Silver has already bottomed out at $26.50 and is heading higher OR it has one more lower low in the tank down to $26.00 or $25.50. Then there is the 200-day moving average at $26.09 and climbing. My preferred scenario is that Silver breaks the 200-DMA, scaring away the last few weak holders. But I believe this would be a fake breakdown, and up we go in Silver. Said differently, I am still leaning down to $26.00-$25.50 despite the most recent bounce. $28 is key resistance.

GOLD PRICE

As for Gold, multiple crystal-clear negative divergences at the peak at $2523 on Aug. 2, 2024, signaled the pullback that has followed. Even so, it is nowhere near as oversold as Silver, which is why Silver will crush Gold in terms of performance when the next rally takes hold.

Gold Price Forecast 2024: Will Silver Outperform Gold?

Gold’s bounce today has hit resistance at $2460, as forecast, and could fall to $2350-$2300 before all is said and done on the downside.

On a general note, I want to point out that many prognosticators believe that if the stock market continues lower, metals and miners are destined to follow. I disagree. Back in October 2008, stocks continued to fall while Gold bottomed and turned up. It wasn’t until March 2009 when QE1 was announced that stocks finally found a bottom at $666. Gold anticipated the Fed’s move to drastic rate cuts and QE six months ahead of time. Since then, we saw the same thing in March 2020. Stocks dump, Fed responds with rate cuts and QE, and up goes Gold and Silver. 

Given these historic examples, it is not just plausible but probable that precious metals and miners will go ballistic when or before the Fed pulls another 180. By contrast, I expect stocks to continue to fall, bounces aside. This time the Fed’s last resort won’t save the stock market, it will simply slow the fall. I’ve been saying this for years and here we are.

Impact of Interest Rate Cuts on Gold and Silver Prices

Finally, the interest rate futures market is pricing in a 50bp rate cut in September. Looking at the metals and miners, this is not priced in “yet”. What happens when it is? And when the Fed ends QT? When it reverts to QE insanity?

Whatever happens, focusing on the big picture, the only way is up for Gold and Silver, and the latter will lead the way higher. I have said this before, but it still needs to be repeated: if you don’t own physical Gold or Silver, the opportunity to buy at such low prices, especially in Silver, is rapidly closing. Consider buying at least “some”! You won’t regret it, imho.