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Gold/Silver: Your silver linings playbook

Commentaries & Views

On occasion, there is a brighter side to the problem we are all having and it was a disappointing and frustrating week for the gold bulls (I am in that camp). Our models continue to expect slower growth and rising "sticky" inflation for the remainder of 2021. Based on last week's strong close, I expected more traction to the upside, with 1845-1860/oz as the target. I did warn a retest of the 200-day moving average at 1816/oz, but it appears the psychological level of 1800/oz is working like gravity (above or below). We will get another opportunity to build positions with clients into next week's probable trading range, with support at 1785-1777 and topside resistance at 1833-1838. To further help you understand the quantitative analyses of the precious metals markets, we created a free "Gold Trends Macro Book," updated with silver slides. You can request yours here: Free Gold Trends Macro Book.

Weekly Silver Chart

Silver Strategy

In addition to gold, my focus will shift to positioning in the long side of sub-$24 Silver, preparing for a fourth-quarter rally as the pattern continues to build a massive "bull flag" on the weekly chart. A simple strategy using the March 1000 oz Silver futures would be to buy Two Mini 1000 oz March Silver contracts per $25,000 and buying ONE at $23.50 and ONE at $22.25, with a stop at $19.50. Doing such would ideally risk $6,750. We would look to a Silver target of $35/oz, which would allow for a profit of $24,250. If you would like to learn more about the strategies we are implementing or learn more about technical analysis, we created a guide to provide you with all the steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Precious Metals.

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.