Silver Launches Toward Major Technical Breakout

Precious metals markets are on the move this week.

They got a boost following Wednesday’s Federal Reserve policy statement. Fed officials kept their benchmark interest rate near zero and vowed to continue injecting $120 billion per month into the bond market.

The central bank seemed unconcerned about bubble-like conditions in equity markets. Nothing seems likely to deter it from pursuing more stimulus for the foreseeable future.

The ultra-dovish Fed helped nudge the U.S. Dollar Index down. It broke below 90 on Thursday to record a new low for the year.

Dollar weakness energized gold and silver markets.

In fact, silver appears to be launching toward a major technical breakout. The white metal gained two dollars through Thursday’s close to clear $26 per ounce. More importantly, it cleared through a zone of resistance to hit a 12-week high.

A strong weekly close that confirms the breakout could lead to a big year-end rally and perhaps set the table for a record run in 2021.

As precious metals buying shows signs of picking back up, perhaps some investors are beginning to rethink the risks of holding conventional paper assets such as U.S. stocks.

Yesterday, the S&P 500 hit a new record – on the same day as America hit a grim record for daily coronavirus deaths.  As California and New York City lock down, a new wave of business closures and job losses will hit the economy to close out the year. 

Millions are struggling like never before just to get by as they wait for a stimulus check or some kind of Christmas miracle to arrive. Much of the country is suffering through nothing short of a great depression.

Yet on Wall Street it’s boom times. Never before have we seen so extreme a divergence between the real economy and the exchange-traded economy.

The stock market boom is being artificially fueled by Fed policies. For now, nobody seems concerned about any negative side effects of all the stimulus. The only concern being voiced about stimulus in the mainstream media is that Congress hasn’t done enough to get more of it out into the hands of ordinary Americans.

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Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

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