Silver logs solid gains pulling gold along with it – now up 6% from yesterday afternoon’s close

(USAGOLD – 7/22/2020) – Silver continued to log solid gains in overnight markets pulling gold along with it as investors moved globally to protect assets against the negative effects of ramped-up government and central bank economic stimulus policies.  Gold is up $15.50 at $1859 and now within shouting distance of its all-time high.  Silver is up $1.36 at $22.74 – a 6% uptick from yesterday afternoon’s close. A weakening US dollar contributed to gold and silver’s appeal and signaled that capital is looking for a place to ride out the stubborn pandemic engulfing the U.S. economy.

“We are in new territory,” says Gold Newsletter’s Brien Lundin in reader briefing. “Today’s moves are dramatic enough, particularly in silver, to believe that there was a combination of short-covering and trend-following taking place. The metals have momentum now, to be sure. Not to rain on the parade, but the question now is how long this momentum can last. I’m not wishing for or predicting a pull-back in the near term, but I would be a bit happier with a more measured rise. I’m not sure we’ll get it. While I wouldn’t be surprised to see some profit-taking this week, the fundamental and technical factors propelling the metals right now aren’t going away. We may have a bit of a consolidation after the next stimulus plans are announced and as the market searches for the next headline, but the stage is now set, at least for gold, for an assault on the old nominal high.”

Chart of the Day

bar chart showing gold's performance month over month from previous year

Chart courtesy of ICE Benchmark Administration, St. Louis Federal Reserve [FRED]

Chart note:  As you can see, gold has not offered this level of strong and consistent month over month appreciation since the 2011-2013 period.

 

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