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Why Gold, Silver Rallied Today, And Where To From Here

Kitco News

(Kitco News) - Some market watchers are scratching their heads at the big upside price moves in gold and silver markets Wednesday. What was the main driving force for the strong prices gains? Was it the depreciation of the U.S. dollar index this week? Was it a re-examination of the U.S. consumer price index report that may not be as indicative of problematic inflation as initially thought? Or, was it a high-volatility day in the U.S. stock indexes today that rekindled notions the stock market still has some rough days ahead, which produced some safe-haven demand for gold? Likely, it was all of the above factors that contributed in varying degrees to the rally in the precious metals markets today.

The surprising gains in gold and silver triggered pre-placed buy stop orders in their futures markets, which sent prices even higher during the trading session. Also, the weak-handed shorts in the futures markets were forced to cover their bets today, pushing prices still higher.

What's more important is where gold and silver prices are headed from here. With today's infusion of needed technical strength in the metals, more gains are likely in the near term, if not longer. Gold's next upside near-term target is the January high of $1,370.50. Gold's next longer-term upside price objective is the 2016 high of $1,377.50.  Silver's next upside technical target is the January high of $17.555. Silver's longer-term upside objective is $18.64. All of these price targets are now within striking distance in the coming days, or few weeks. Stay tuned!

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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