Gold Looks Good & Silver Looks Great

For silver, all roads probably lead to the $22-$25 area. For gold, all roads likely lead to $1600-$1800. There could be significant bumps in these roads, probably involving time more than price.

(Click on image to enlarge)

silver chart

Silver looks stronger than gold, but gold is also looking very solid, from both a fundamental and technical perspective.

Whether silver breaks out from the bull wedge now or a bit later really doesn’t matter. 

My recommendation to silver price enthusiasts is to get in on the action right now and buy more on any further price softness which may or may not happen.

(Click on image to enlarge)

daily gold chart

It’s been my firm contention that rather than roar higher or melt lower, gold is poised to consolidate with sideway action.

The $1465 support zone is acting like a sponge more than a trampoline or trap door, and that’s positive.

While the Western fear trade gets the most attention from gold market fundamentalists, it’s like the hare while the love trade is the turtle. In the long term, it could be the love trade that drives and sustains gold at prices that currently seem almost unimaginable.

One of my predictions has been that Dubai (the city of gold) will ultimately become the world’s main center of price discovery.

Dubai jewelers estimate the world’s annual demand for gold jewelry at more than 2000 tons, and they project solid growth for the long-term.

Mine supply is stagnant and central banks don’t appear interested in selling gold. India’s RBI has recently joined the central bank “buy club” with modest accumulation. 

On the demand side, Dubai’s new gold policy can help make the $1400-$1500 zone into a real floor.

The “lower for longer” approach to interest rates in the West is another floor building theme. 

Also, the US-China trade deal appears to be more of a tariff taxes lock than an actual trade deal, and I’ve predicted these tariff taxes will be here for at least the next decade.

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