A New Bull Market In Gold?

We continue to think precious metals are one of the best risk vs. reward opportunities right now.

Last week, we shared the Gold to $5K Report with you from our friends over at All Star Charts.

You can check it out here, in case you missed it. The report outlines all of the reasons why Gold could hit $5,000/oz. sooner than the crowd expects.

Today we want to reiterate that it's not just Gold that looks attractive here. Silver is also poised to move higher.

Gold and Silver Futures Chart

As you can see above, Gold & Silver are confirming one another by hitting 6-month highs together.

The current leg higher began a couple of months ago after both metals formed a failed breakdown at support. As you might know, failed breakdowns often lead to fast moves higher, and we're starting to see that play out.

Silver Futures Chart

When you zoom out and look at a long-term chart of Silver, you'll notice it's in the process of forming a massive Cup & Handle pattern that dates back to 1980.

The next long-term objective for Silver is around $50, which is the all-time highs from 1980/2011. That's more than 100% higher here!

Be sure to download this free report to learn how to profit from this potentially historic move.

Enjoy,
The INO.com Team

Golden Pattern For Silver, Not Gold

Silver futures continue to maintain leadership not only among metals, but compared to all futures as we can see in the leaderboard below.

MTD Relative Performance

Chart courtesy of finviz.com

The white metal has seen gains of close to ten percent month-to-date. None of the metals come close as copper futures, formerly the number two, has lost its shine lately as I shared the reason last week. When compared to silver futures, gold futures appear pale with gains of 2.62%.   

All last week, I observed a pattern in the making, watching to see when it would trigger. As a result, exactly at the end of last week, the expected event happened. Here is a visual representation in the daily chart below.

Silver Futures Daily Golden Cross

Source: TradingView

There are two simple moving averages in the silver daily chart above. The blue line represents a 50-day moving average and the red one is a 200-day moving average. We can see that last week the short-term blue line crossed above the long-term red line. This pattern is called a “Golden Cross”. It is a bullish sign as it indicates a change in the trend to the upside. Continue reading "Golden Pattern For Silver, Not Gold"

Poor Man's Gold Shines The Brightest

Please take a look at the graph below. These futures left their competitors far behind with a tremendous gain of almost twenty percent in only one month.

1 Month Futures Performance

Chart courtesy of finviz.com

On a one-month horizon, silver's meteoric price increase is undeniable. None of the metals can even come close. Copper is lagging eight percent behind as gold futures show only half the performance of silver. By the way, I am about to show you the relative dynamics of these top metals in the chart below.

Gold-Silver Ratio

Source: TradingView

The chart above visualizes the comparative superiority of silver futures over gold futures that we revealed in the first graph. The white metal has been reversing its nine-year losses since the bottom of 2011 at 30 oz up to the all-time high at 127 oz in 2020, where the large age long cycle has been completed. Continue reading "Poor Man's Gold Shines The Brightest"

Gold Market Sentiment Adjusts To Recent Fed Comments

The Merriam-Webster dictionary defines sentiment as, “an attitude, thought, or judgment prompted by feeling: predilection.: a specific view or notion: opinion.: emotion.: refined feeling: delicate sensibility especially as expressed in a work of art.: emotional idealism.”

As it pertains to the financial markets, market sentiment is the view or attitude that creates our opinion as to whether an asset class is overvalued or undervalued. It shapes and changes the value of a stock or commodity’s price.

Market sentiment is overly sensitive to statements and comments made by Federal Reserve officials because those individuals have the power and influence to change monetary policy.

There is a dramatic difference between the perception of upcoming Federal Reserve monetary policy changes and the actions of Federal Reserve officials.

The Federal Reserve raised rates at every FOMC meeting this year except in January, from March through November, a total of six rate hikes. Over the last four FOMC meetings (June, July, September, and November) they raised rates by 75 basis points.

The aggressive nature of the Federal Reserve’s monetary policy moved gold dramatically lower from March up until the beginning of November. Gold traded to its highest value this year of $2078 in March. By the beginning of November, gold prices had dropped to approximately $1621, resulting in a price decline of 21.99%.

During the first week of November, market sentiment shifted because inflation rates had declined fractionally, and investors viewed this fractional drop as a signal that the Federal Reserve would begin to loosen its aggressive monetary policy. This caused gold to rise dramatically from $1621 to an intraday high of $1792 by Tuesday, November 15. Continue reading "Gold Market Sentiment Adjusts To Recent Fed Comments"

Can Central Banks See What We Don't?

The gold futures have skyrocketed on better than expected U.S. inflation data last week. The annual inflation rate in the U.S. slowed for a fourth month to 7.7% in October, the lowest reading since the start of a year, and well below forecasts of 8%.

US Annual Inflation & M2

Source: TRADING ECONOMICS

According to logic, the gold price should fall as anti-inflationary tightening measures have shown positive results in cooling price growth. The printing press, represented by the M2 money supply indicator (black dotted) in the chart above, has stopped and the reading is declining as well.

Let us check the chart below to look for an answer in the fundamental data of world gold demand.

WGC Gold Demand

Courtesy of World Gold Council

The graph above shows the quarterly data of demand statistics in the period from Q3 2021 to Q3 2022. According to the data, the most stable demand source comes from a technology side (wine-colored). The jewelry demand (dark purple) is price sensitive: it shrinks on the rising price and expands during price falls. The investment demand (dark green) is cooling down amid the tightening as per the logic I explained above. Continue reading "Can Central Banks See What We Don't?"