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Gold and Silver Poised for Major Breakout

Summary

  • Gold price has surged over 20% in less than two months, defying traditional financial correlations.
  • This rapid increase suggests a new bull market phase for gold.
  • The global gold market is shifting, with eastern markets taking the lead.
  • Analysts' price predictions for 2024 have already been surpassed.
  • Western investors are piling into gold through derivatives.
  • Beware of misleading mainstream media coverage and untrustworthy dealers in the precious metals market.
  • CBS News has been criticized for promoting dubious gold dealers.
  • Spot gold price reached an intraday high of $2,430 before a selloff.
  • The gold-silver ratio is threatening to break higher, potentially leading to a silver price surge.
  • Investors are advised to be cautious of dealers selling incorrectly weighted bullion bars.

Gold’s recent price rally and leading the way for silver to follow has been remarkable in many ways. 

Firstly in its recent speed and extent of climb. Gold has jumped up by over 20% within less than two months through to today's intraday price peak briefly clearing $2,430 oz. 

Other than a long rally into its August 2011 peak, gold has not seen such an aggressive price increase over such a short period of time in many years. More on that in a full fiat currency era context later in this week's bullion market update.

Gold has been defiant of traditional fiat financialized correlations leaving many with green colored goggles confused. Recently rising real yields should cut its price (whatever). Rising DXY or relative fiat USD strength of late (not phased). Policy interest rate expectations have actually increased and only a few Fed Fund rate cuts are now predicted for the year, yet gold's rising spot price doesn't seem to care all that much either. 

Unsecured ETF outflows for years in the west, while the east will take those underlying bullion bar outflows often passing through Swiss major gold refiners. Thank you very much. All while simultaneously COMEX warehouse raids for bullion bars continue.

And so global gold market trends and the pricing dynamics are shifting in real time.

Case in point, the alleged precious metals price analysts that City of London agents like to publish on an annual basis. Everyone one of their fiat US dollar gold price high guesses for this year 2024 have already been surpassed. And yea, it's only April 12th, 2024.

We're in new nominal price high territory now. You know what that means? The western momentum longs are piling in and leveraging long via COMEX derivatives.

Let's check in on some mainstream coverage of gold this week as people try to figure out the myriad dynamics at play.

Some decent broad strokes even while being surrounded by cartoon pictures of what look like 400 oz gold bar depictions, yet 1000 grams is only 1 kilo of gold so the cartoon bars should be more like the size of a modern smartphone instead.

We'll get into a real life example of a common error in bullion weights and measures later on this update. Some of you might be pulling out your silver bullion bars upon learning this news to weigh and ensure you didn't get swindled by this apparent incompetence.

Now moving on to the supposedly trusted CBS News source, and a few amateur hour gold market takes.

I know, right. The inference that any unsecured retail gold ETF owns any damn bullion bar is bad enough. You own nothing but a derivative of price while paying annual management fees for the pleasure of underperforming bullion bid premiums to come.

And no, buying and selling bullion is not hard. We're not helpless toddlers. Stop treating your viewers like so.

But it gets worse.

You see, for the past few years, CBS News has been regularly renting out its trusted name brand to some of the alleged greasiest worst actors in the precious metals industry that can generate leads to upsell and rip off typically unsuspecting elderly CBS News online article readers.

This has been going on for years. Case in point from this week.

CBS News gets consistently paid to advertise via eight grade level general gold insight articles, by many of our industry's most embarrassing dealers who are actively looking for novice leads to take advantage of.

Their sociopathic aim is often to push would be low premium bullion bars and coin buyers into often overpriced odd weight "exclusive" bullion coins that often get marked up +50% or more over their melt value.

Both many elderly and gullible people are getting their IRAs taken for huge rides, sending the victims to the retirement poor house. All while CBS News apparently has no qualms being paid to take part in this ongoing industry abhorrence.

Not sure if or when the class actions lawsuits will kick into high gear, but my bet is they'll be coming in waves aimed at both greasy dealers and even CBS News itself in the coming years, as investors increasingly realize they've been collectively bilked by such practices.

Stick around.

We're going to go through what the crazy price volatility witnessed in spot gold and silver prices today.

With a longer term view of where this we're trending.

The spot gold price blew through $2,430 oz intraday today with a large selloff to follow cutting over $80 oz in price before the week's trading finished. The spot gold price still finished higher overall on the week at $2,350 oz ask.

The spot silver price briefly threatened $30 oz today only to have a similar sell off to finish the week slightly up near the key $28 oz price level.

The spot gold silver ratio fell slightly to finish just below 84 on the week.

To induce that selloff to end today in gold and silver spot prices required a massive volume of trading.

Some of the largest volumes we have seen in some time for both precious metals in the derivatives markets.

But the picture for bull market mania leading gold is this. 

This latest rapid upswing in gold prices relative to its now 200 day moving average now above $2,000 oz suggest to me that we are now moving into a forth gold bull box phase if you will on this chart.

Of course you see the other three here, two in the 1970s bull, and another wrapped around the 2008 GFC and the 2011 high price achieved back when US debt got downgraded the first time.

Now we are looking down the barrel of a US bond bear market for years and perhaps decades to come.

The world is going for bullion over bonds and other counterparts risk bubble priced asset classes.

Gold's record nominal price climb is just getting underway.

Turning to silver. Yea, the 28 to 30 oz level is a major congestion zone. So the inevitable eventual leaving these spot price levels behind is coming. Maybe not next week, or even in the next few months. But this year?

I'll take that bet.

And leave that bet on throughout this decade without blinking on eye.

Remember that last time the silver spot price got TAMP'd down when it threatened to leave $30 oz resistance and make a run in early 2021?

Yea well this time the spot gold silver ratio is threatening to break through this technical upswing it has built ever since. 

It threatened to break it today.

How much longer can this hold on?

And when it finally falls the run through $30 into the $40 oz will likely be swift similar to 2011.

Except this time we have a launch pad base we built and exceptional market fundamentals driving us to come.

Now as promised a polite warning for bullion stackers out there. We ran into a dealer complaining about a 5 troy ounce bullion bars that were apparently manufactured with someone using the wrong weights and measures.

If you have bars by this manufacturer, you might want to double check you got what you thought you paid for with a digital scale.

People make this mistake often in the scrap gold market, and are taken for a ride given their lack of knowledge. But if you are thinking about minting your own products, maybe come to our website and learn the difference between a common ounce versus a troy ounce before you make the same mistakes.

Let's move on to Indian coverage of the silver market this week with a few highlights from Manisha Gupta's recent work.

Both technically, fundamentally, and macro economically. Silver might be the best combination of momentum and longer trade in the entire financial market. 

I hope by now you have positioned yourself well and prudently in bullion.

Get ready to see the momentum pile on for silver to come once this $30 oz ceiling becomes the floor for the fast climbs that follow higher.

That is going to be all for this week's SD Bullion Market Update.

As always to you out there.

Take great care of yourselves and those you love.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...

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