Gold And Silver Experience Stunning Gains, More Catalyst Coming

Gold and Silver Experience Stunning Gains, More Catalyst Coming - Nathan McDonald (August 7, 2020)

Gold and silver just experienced a stunning week, in which they surged higher based purely on real, solid fundamentals—and truly spectacular gains are yet to come.

This stands in stark contrast to the truly mind-boggling actions seen over the last few years in the broader markets, whose gains were largely based on illusions, huge injections of fiat money, debt creation, and all-around tomfoolery.

It is going to take time for people to adjust to this reality, to understand that the rally in both gold and silver bullion is based on overwhelmingly strong fundamentals, as it has been so long since the financial world has operated in such a manner. However, once this change in mindset occurs, we will experience one of the greatest bull markets this world has ever seen, with precious metals taking off to what some would believe unobtainable levels based on today's pricing.

(Click on image to enlarge)

(Chart Sources, goldprice.org)

This week’s trading action in the metals was a just a sample of what is to come. Both metals leaped to new levels, as I predicted they would after breaking through key resistance levels just a few short weeks ago, carried higher first by true fundamentals, then propelled even further by the Wall Street algorithms, with both feeding upon the other in a revolving cycle.

However, as stated last week and as we are seeing in today's trading action, pullbacks will occur, and this is a good thing. We do not want a runaway breakout, a straight up parabolic rise such as we saw during the Bitcoin mania, as that leads to weak hands and an inevitable crash lower.

A steady, healthy increase higher with new "floors" being set is what we want to see, as that will ultimately result in longer-term, more sustainable gains, with more stronger hands staying with precious metals as they inevitably climb higher.

This pullback in precious metal prices comes on the heels of a strong payroll numbers report, as 1.76 million jobs were added according to official reporting by the Bureau of Labor Statistics.

1 2 3
View single page >> |

Disclaimer: The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
William K. 1 month ago Member's comment

Thanks for the article. Of course gold and silver are taking off. They are proven to be what is stable in uncertain and unstable situations, and both would be considered "crash proof" in that their value is more resistant to management errors and market emotional disturbances.

As for our presidential candidates, once again I assert that one more choice should be available, being :"NONE of the above". That would be a vote rejecting all of the presented choices, not merely an abstention from making a selection.

This time I doubt that Mr Biden would be capable of adequate governance for the full four years, and my concern about Mr Trump is that he is no longer able to control his mouth or his tweets. The random proclamations are dangerous and often inflametory.

I think that starting a war of any kind with either China or Russia would be far more damaging to the USA than the terrible explosion disaster in Lebanon. It would not matter who won or could be considered the most undamaged survivor. Thus a better choice than either of the present ones is needed.

Chee Hin Teh 1 month ago Member's comment

Well said and many thanks