Hawaii Six O - Gary Wagner
Ground Control to Major Tom
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Ground Control to Major Tom. Take your protein pills and put your helmet on. Ground Control to Major Tom (ten, nine, eight, seven, six). Commencing countdown, engines on (five, four, three). Check ignition and may God's love be with you (two, one, liftoff) – David Bowie
Both gold and silver continue to soar towards the heavens, with gold once again reaching a new all-time record high in trading today. Both precious metals have been accelerating at a pace few traders have ever witnessed. Gold has clearly entered into the vastness of empty space were there is no up nor down east or west and every step is a journey to prices before seen.
Gold futures basis the most active December 2020 contract is currently trading at $2075.20, gaining $25.90 (+ 1.28%) on the day. The September contract of silver futures is currently at $29.01 gaining $2.12 (+ 7.88%). Recent price advances this week have taken these two precious metals dramatically higher in the case of gold to a series of all-time record highs, and in the case of silver advancing by 4% to 8% daily.
The underlying fundamentals that have been instrumental in gold and silver historical rise, have been written about ad infinitum. Market analysts have been unified with the understanding that it has been the monetary policy of central banks globally, and specifically the Federal Reserve the United States that have devalued currencies worldwide that are the at the and root responsible for gold gaining over $650, and silver gaining over $16 since the middle of March. The double-digit gains in gold and price doubling in silver have been monumental as the world deals with the economic hardship that the global pandemic has caused.
While analysts agree upon the underlying reason that gold and silver have had such remarkable advances, they seem to be all over the board in terms of the potential upside of both gold and silver. Here are a few examples of what analysts believe both gold and silver pricing could go to in the near future.
According to George Gero of RBC wealth management, “Gold-Silver ratio is at 73.9 — new low, but bullish. The rally is projected to continue with silver reaching $30 an ounce and gold $2,100 by year-end.”
According to Carsten Fritsch of Commerzbank, “Despite some solid drivers supporting the precious metals, including weaker U.S. dollar and negative real interest rates, their surge upwards is becoming excessive … Gold has gained by approx. $250 since mid-July, while silver has soared by 45% during the same period … This makes a correction increasingly probable.”
While Carlo Alberto De Casa, chief analyst at ActivTrades said, “Gold price continues to skyrocket as demand for the precious metal surges,”
However, Edward Moya, senior market analyst at Oanda said , “Gold is surging once again after better-than-expected jobless claims, real yields resume their freefall, and as lawmakers struggle to make further progress on stimulus talks,” he said.
According to VanEck, creator of some gold-backed funds, is forecasting that “gold to touch $3,400 an ounce”.
As reported by Kitco News, E.B. Tucker, director of Metalla Royalty believes that momentum will continue in gold all the way to 2500 by the end of the year.
The simple truth is that with gold at all-time record highs no one really knows for sure where this historical gain to multiple all-time record highs will conclude. The only facts that are clear is that gold is in unknown territory with no technical data to compare current pricing to.
That being said although analysts have a wide swath of estimates, and forecasts two things are clear; first, gold and silver pricing could continue to ride the rocket ship to higher pricing. Secondly is the caveat that must accompany the stratospheric market forecasts by analysts which is that at some point without rhyme or reason we could see a moderate to strong corrections occur in both precious metals.
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Wishing you as always, good trading,