Hawaii Six O - Gary Wagner
A sharp rise in gold is overshadowed by silver's daily gains
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
With the exception of platinum, the rest of the precious metals complex traded on the futures markets all exhibited very respectable gains. Leading the forefront was silver futures, which gained 3.6% in trading today. This was followed closely by the electronically traded fund SLV, which outperformed futures as they gained 3.90%. The Ishares Silver trust is currently up to $0.98 per share and fixed that $26.25.
As of 4:10 PM EST, silver futures basis, the most active March 2021 Comex contract is currently fixed at $28.245, after factoring in today’s net gain of $0.98. Although the initial open for trading today created a small gap between the close on Friday, silver prices filled the gap when they traded to a low of $27.33 and then recovered with substantial gains.
Gold futures prices recovered and had a strong showing gaining $30 on the day. Basis, the most active April contract gold, traded and closed above $1800 per ounce for the first time since it broke below $1800 on February 16. Currently, April futures are fixed at $1807.30, which is a net gain of 1.68%, or $29.90. Not far behind in terms of percentage gains on the day was the electronically traded fund GLD which gained 1.49% and is currently fixed at $169.50.
Although gold had a stellar performance today, it continues to be outshined by its sister metal silver. On a technical basis, we have seen silver prices climb substantially ever since the 50-day moving average crossed above the 100-day moving average, which occurred on January 25.
During the end of January, silver was trading at roughly $25.50 per ounce. After a rapid price advance which took silver prices to $29.40 then on February 1, it sustained a major selloff taking the precious white metal to $26.33. What would follow would be a period of 12 trading days in which prices consolidated around $27.
In fact, silver dropped to its 50-day moving average on Friday of last week, trading to an intraday low of $26.10 before recovering above $27. This was followed by today’s stellar performance taking silver well back above $28 per ounce.
Both gold and silver rebounded today as they reacted to market sentiment, assuming that there would be inflationary concerns down the road. These concerns outweighed the upswing in treasury yields. In the case of silver, the industrial use combined with inflationary concerns were underlying factors moving silver higher.
Our target remains $30 to $33 in silver. We believe that it could easily reach the upper ends of our projection once a final fiscal stimulus bill is voted upon and passed.
All of the precious metals benefited from a weaker U.S. dollar. The dollar index lost roughly 3/10 of a percent today and is currently fixed at 90.10
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Wishing you as always, good trading and good health,