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Gold/Silver: Is the bottom in?

Precious Metals came under pressure this week, led by better than expected employment data and a lack of follow through on a U.S. credit rating downgrade. If you remember, in 2011, the economy was still struggling to find its footing after the fallout from the financial crisis. Unemployment was hovering above 8%, GDP was trending below normal levels, and credit spreads were wide, focusing on the "Pigs" (Portugal, Italy, Greece, and Spain). While in 2023, the economy shows signs of strength and resiliency, led by GDP at 2.4% and record low unemployment rates. 

It took Friday's surprise miss on payroll data indicating 187,000 jobs created versus 200,000 expected, which helped Gold find its footing and recover from its recent decline. Will one miss be enough to stop the Fed's aggressive stance on interest rate hikes? We will have to wait and see. Tuning into next week's economic data, we will have another round of inflation readings with CPI on Thursday and PPI on Friday. 

Daily Silver Chart

Coming into Friday's opening bell, Silver futures are down 5% month to date and approaching another "value buy area." Rising support levels with the 200-day moving average at $23.49 should act as your first area of interest when adding positions. Overhead, $24.20 will be your first resistance point, followed by $25, and any close over $25.60 will lead to another round of short covering followed by a wave of ETF inflows. Our long-term thesis remains that tightness in the physical markets, a decline in mining supply, and solar and electric vehicle demand should offset any potential for prices to decline below $22. Strains on the electrical grid and the almost certainty of additional Chinese stimulus should help cement a floor on Copper and Silver prices. 

We updated our "5-Step Technical Analysis Guide" and integrated our "Top 5 trade ideas for Q3." Please download and review our Copper, Gold, and Silver strategies. The guide will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here:  New 5-Step Technical Analysis Guide.

Daily Gold Chart

Gold futures bounced off the 200-Day moving average at 1957.7 as traders repositioned for a "Fed Pivot." If we see CPI and PPI moderate around expected levels next week, that should clear the way for another assault on $2000/oz. The market must punch through resistance levels at $2025/oz to make a run for all-time highs. Next Friday, a seasonal play comes in, with Gold historically rising 12 out of the past 15 years over the following two weeks. Please feel free to reach out if you would like the trade details. 

Having the flexibility to enter and exit the market quickly makes it essential for Precious Metals investors to have a futures trading account alongside their core Physical Precious Metals holdings. If you are interested in speculating on the rise and fall of the price of Precious Metals on a shorter-term basis, such as two weeks or two months, or If you have never traded futures or commodities, check out this new educational guide that answers all your questions on transferring your current investing skills into trading "real assets," such as the 1000 oz Silver futures contract. You can request yours here: Trade Metals, Transition your Experience Book. 

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