Stefan Gleason Blog | Gold & Silver Surging Toward Long Awaited Breakout | Talkmarkets
President at Money Metals Exchange
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Gleason is president of Money Metals Exchange, a national precious metals investment company and news service with over 450,000 readers, 35,000 paid customers, and $120 million in annual sales. He launched the company while president of a national newsletter publishing ... more

Gold & Silver Surging Toward Long Awaited Breakout

Date: Friday, May 7, 2021 9:25 PM EDT

 

The long-awaited breakout in gold and silver may finally be upon us.

 

The gold market had been knocking on the door of the $1,800 level for the past three weeks. On Thursday, prices pushed strongly above that resistance line to close at $1,822 an ounce.   Turning to silver, the white metal has surged 6% higher this week, poking above $27 per ounce.

 

Although silver prices traded up to the $30 level briefly in early February, a sharp selloff followed that caused the market to put in a significantly lower close for that week.

 

Some long-term traders prefer to follow weekly rather than daily technical and momentum indicators.

 

A decisive move above $30 an ounce confirmed by a weekly close would be hugely bullish. It would represent a breakout from the consolidation pattern that has formed since last summer. It would also establish a fresh new multi-year high for the precious metal.

 

When silver is ready to run, its rallies can be fast and furious. So, a rapid move to new all-time highs above $50 can’t be ruled out.

 

But the market will ultimately move at its own pace, so having a long-term time horizon is the best way for investors to avoid missing out on the next big move.

 

Precious metals markets will lift over time with the rising tide of inflation. Recent trends show inflation running hotter than it has in years.

 

In recent days, officials at the Federal Reserve and Treasury Department have gone out of their way to downplay the inflation problem. They insist inflation pressures showing up in the economy right now are “transitory.”

 

But the trillions of dollars in new spending, borrowing, and currency printing coming down the pike from Washington will have long-term consequences.

 

The Treasury Department recently reported it expects to borrow $463 billion in the current quarter – far more than previously expected. The new spate of Biden borrowing will spike the federal budget deficit to $2.3 trillion. All in a single year.

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