As the summer officially begins this Friday, the reality that precious metals once again are taking the lead as the true flight to safety not just for individual investors, but for the central banks around the world.
After a massive rally in gold and silver finally breaking above long term technical support the big question is now what?
Let us take a look at the year to date charts so I don’t bore my readers with my usual historical perspective and provide the alternative point of view as real and trade wars are truly distorting the economic worldview.
Gold appears to have entered into a potential short term consolidation phased based on recent price action after the “Liberation Day” rally which terrorized the globe.
After an initial proper correction after the major breakout, the second rally on the Chinese trade war justified the higher prices and now has behaved technically perfect since mid-April to indicate it is in a consolidation area between $3200-$3500 as this author projected on the weekly MacroEdge X-spaces broadcast a month ago. In fact my original warnings about a new higher high than my December 2024 prediction thread is possible now with the added spice of geopolitical instability.
Silver on the other hand has also decided to put on a show and does it have some serious room to move towards its old highs.
After the various institutions managed to quash two decent looking rally attempts at the $35-$36 range silver has finally broken out and after some profit taking today, looks poised to run up to the psychological level of $40 per ounce.
Once it breaks above that level, as stated here previously, $48 will be the next major obstacle to over come but based on industrial demand alone. Add in the shortages in America’s silver storage plus the idea of building more electronic components in the US and the formula is there for a historic run to bring the silver/gold ratio closer to the 40:1 historic norms.
For the Fed and a few other central banks that is a terrifying proposition.
Just remember, once the metals break out be it due to economic or geopolitical reasons, both of the primary precious metals are born to run much, much higher.
silver is your best bet and pre-1965 US coins are the best silver. Halves, quarters and dimes are .715 ounce to the dollar face value. They are recognizable by all and if the fecal matter hits the ventilator you’ve got spendable currency. If a gold eagle hits $10,000 in mad max world you can’t buy groceries with it but a couple of silver quarters will work.
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