Today, both silver and gold broke above important technical levels. The gold price hasn’t been this high since September 2011 when it peaked at $1,923 during that month. Silver finally pushed through the critical $18.50 level and closed at $19.16, according to prices on Stockcharts.com.
First, let’s look at silver. While silver is still lagging behind gold, I believe it will start to outperform the yellow metal once it finally BREAKS above the $21 level. The monthly silver price has been stuck below the $18.50 level since 2016. While silver has traded above $18.50, it has not closed above it. We need to see the body of the Monthly Candlestick close above $18.50 for it to be a positive sign for traders. And, with silver closing today at $19.16, we could see a move to $21 rather quickly:
Traders pay attention to these technical levels, and right now… they are what’s driving the paper price. That will change in the future when “Physical demand” becomes the main driver of price, but for now, it’s paper trading. Again, it was important for silver to finally break through that $18.50 level on a monthly basis. For new readers, the candlesticks above represent an entire month’s worth of trading.
When a stock or commodity breaks above a long-term resistance level, such as the $18.50 level here, then it becomes on the radar of more traders. Thus, we could see a great deal more momentum as traders jump aboard. This could push the silver price to the next $21 level, rather quickly. We will see. I know that sounds “wishy-washy,” but that is how trading works. There are no guarantees.
However, I believe the price that most traders are looking at is the $21 level. Once silver pushes above this level, then we could see a fast BREAKOUT to $27.50. I will discuss this in a new video update.
Secondly, with gold trading above $1,800, it has now had a lot of traders paying close attention. Because gold has finally broken through this level, it will attract more traders to come in and push the price up to $2,000. This is called “Momentum Trading.”
I have been providing updates on the Gold price since mid-2019. I stated once gold broke above the long-term $1,350 level, it would quickly move up to the next level, $1,550… and that is precisely what it did. Once gold pushed through the $1,550 level, it shot up to $1,800 in the next three months. What is interesting, there are no RESISTANCE LEVELS for gold remaining. Sure, maybe the high set in September 2011 at $1,923, but this means the price could move rapidly up to $2,000. We will see how gold trades over the next weeks and months.
POINTS TO CONSIDER… because traders are controlling the gold and silver paper prices, if we understand technical analysis, it provides some clues on how the prices may move. I spent some time trading in the markets and learned that when stocks and commodities break through certain KEY LEVELS, more likely than not, more traders come in, and with “Momentum trading,” we can see the prices pushed up very quickly.
Of course, the massive money printing and central bank insanity are the fundamental reasons for traders-investors to move into precious metals. Because gold is the king monetary metal, its price action has been outperforming silver. However, silver is just as good as a monetary metal as gold, but it has to break free from the “Ball & Chain” of its Industrial component… and it will.
Due to the fallacy that the world is run by ENERGY TOOTH FAIRIES, many analysts cling to the outdated understanding that silver is mostly an industrial metal. I believe when the world heads over the ENERGY CLIFF, silver will break away from being just an industrial metal. This is when it will be very rewarding to be holders of physical silver bullion.
About the Author:
Independent researcher Steve St. Angelo started to invest in precious metals in 2002. In 2008, he began researching areas of the gold and silver market that the majority of the precious metal analyst community has left unexplored. These areas include how energy and the falling EROI – Energy Returned On Invested – stand to impact the mining industry, precious metals, paper assets, and the overall economy.