Gold New Record Highs as Silver Plays Catch Up and Challenges Long Term Resistance

Gold

Gold has rallied to new record highs in early New York trading again today due to continuing nervousness in markets and much uncertainty about the economic outlook for the coming months. Equity markets are mixed, oil is back over $78 a barrel but most importantly the dollar continues to fall in value against most currencies and especially gold.

Competitive currency devaluations continue with suspicions that many Asian central banks (including South Korea, India, Malaysia, Taiwan, the Philippines and Singapore) were intervening in currency markets overnight attempting to devalue their currencies and maintain export growth. The concept of currency debasement has been anathema to markets in recent years but it is again beginning to enter the popular consciousness with obvious positive ramifications for the gold market.

Gold is currently trading at $1,312.27/oz, €963.28/oz, £825.80/oz.

Silver

Silver may soon challenge long term resistance at $22.38/oz (weekly close) a price level last seen nearly exactly 30 years ago on 26th of September 1980. A close above this level would be very bullish and could see silver challenge the psychological round numbers of $25/oz and $30/oz. The record quarterly high of $32.20/oz (on 31/12/1979 – see chart below) will also be looked at by chartists and technically minded traders. Long term, the nominal high of $50/oz remains quite possible given the favourable supply demand dynamics.

Silver – 42 Year (Weekly). Click on image to view full size

Silver remains undervalued on an historical basis and is undervalued even against gold. While gold has begun to receive some interest from retail investors, silver remains the preserve of relatively few contrarian investors and the media and financial press rarely if ever covers silver. And yet silver is quite likely in the intermediate stage of a bull market that may rival that of the 1970s.

Gold (orange), Silver (yellow) and Gold/ Silver Ratio (white) – 40 Years. Click on image to view full size

Many analysts believe that silver’s ratio to gold will revert to its mean average in recent history below 50:1. Even if gold only remained at some $1,300/oz this would see silver rise to some $26/oz ($1,300oz/50=$26/oz).

Silver – 40 Years (Quarterly). Click on image to view full size

A quarterly close for silver today near the $22/oz level will be bullish technically as it will be the second highest quarterly close ever. Chart watching traders may see the record quarterly high of over $32/oz as the next level of real resistance. While the record high in January 1980 is often attributed to the Hunt Brothers cornering the market – it should be remembered that there are thousands of more billionaires in the world today, not to mention hundreds of powerful hedge funds, many of which could again attempt to corner the silver market.

Silver is unique in terms of being both a monetary and an industrial metal. Silver is priced at some 22/oz today. The average nominal price of silver in 1979 and 1980 was $21.80/oz and $16.39/oz respectively. In today’s dollars and adjusted for inflation that would equate to an inflation adjusted average price of some $60/oz and $44/oz in 1979 and 1980. It is for this reason that we believe silver will be valued at over $50/oz in the coming years. Portfolio diversification with non-correlated assets is essential now more than ever and investors should consider a small allocation to silver.

Silver is currently trading at $21.98/oz, €16.13/oz and £13.83/oz.

Platinum Group Metals

Platinum is trading at $1,655.00/oz, palladium is at $567/oz and rhodium is at $2,300/oz.

Mark OByrne

Also on news-goldcore-com

Videos

Gold Helps Me Sleep at Night

The King and Queen will be Gold and Silver

Jim Rogers Interview

Blog posts

Gold’s Role in the International System

Investors choose to invest in gold bars and buy silver bars because there is no counterparty risk. In a world where money is devalued every second and governments are scrambling to stay afloat, it’s worth holding some assets outside of the increasingly tenuous financial system. Below, we look at two countries who couldn’t agree more.  […]

READ MORE

What the World Cup can tell us about inflation

Football, love it or hate it, will dominate news outlets and Zoom small talk for the next month. Both the sport and the politics have entered the debating arenas, but there has been little mention of the whopping prize fund. Yes, football is one of the world’s largest industries, but is the prize fund just […]

READ MORE

The Bitcoin is ‘as-good-as-gold’ myth is over

When you invest in gold or buy silver coins with GoldCore you are choosing to invest in an asset that has no counterparty risk. Sadly those who have been holding their bitcoin on the crypto exchange FTX, have not experienced the same level of reassurance and service from the exchange’s management. This event is all […]

READ MORE

Featured

The King and Queen will be Gold and Silver

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Gold Helps Me Sleep at Night

The King and Queen will be Gold and Silver

Jim Rogers Interview

Blog posts

Gold’s Role in the International System

Investors choose to invest in gold bars and buy silver bars because there is no counterparty risk. In a world where money is devalued every second and governments are scrambling to stay afloat, it’s worth holding some assets outside of the increasingly tenuous financial system. Below, we look at two countries who couldn’t agree more.  […]

READ MORE

What the World Cup can tell us about inflation

Football, love it or hate it, will dominate news outlets and Zoom small talk for the next month. Both the sport and the politics have entered the debating arenas, but there has been little mention of the whopping prize fund. Yes, football is one of the world’s largest industries, but is the prize fund just […]

READ MORE

The Bitcoin is ‘as-good-as-gold’ myth is over

When you invest in gold or buy silver coins with GoldCore you are choosing to invest in an asset that has no counterparty risk. Sadly those who have been holding their bitcoin on the crypto exchange FTX, have not experienced the same level of reassurance and service from the exchange’s management. This event is all […]

READ MORE

Featured

The King and Queen will be Gold and Silver

READ MORE