Gold and Silver: The Trend is Your Friend

Gold demonstrated a strong performance, moving 7.03% higher in Q1 and closing March at an impressive $2,217.40 on the nearby COMEX futures contract. This robust growth should instill confidence in investors. Silver also showed promise, rising 3.45% over the first three months of 2024, reaching $24.916 per ounce.

Gold's outperformance of silver in 2023 continued into Q1 2024. However, the narrative is shifting in early Q2. While gold is making higher all-time highs, silver has burst out of the gate with a bullish fire, its price surpassing the $28 per ounce level. This promising start should fuel optimism among investors.

On Friday, April 5, gold and silver put in very bullish technical formations on their respective daily charts. The leading precious metals traded at lower prices than in the previous session before rallying to new highs. Gold reached a new record peak, while silver traded at its highest price since June 2021. The bullish key reversal patterns spotlight the metals with long histories as means of exchange and are a commentary on fiat currency values.

Gold’s bull market continues

• June gold futures reached the most recent $2,448.80 high on April 12.
• Gold’s bull market began at the $252.50 1999 low.
• Every dip in gold over the past twenty-five years has been a buying opportunity.

 Silver’s penchant for volatility could lead to a parabolic move

• On April 15, 2024, gold’s monthly historical volatility was 14.84%, and silver’s monthly price variance was 27.57%.
• Silver’s price, speculative interest, and higher volatility can lead to significant price moves when silver moves above or below critical technical price levels.
• May silver futures broke above technical resistance at the March 2022 $27.32 continuous contract high in early April and rose to $29.9050, the highest price since June 2021on April 12.

 A decline in the silver-gold ratio tends to be bullish

• The silver-gold ratio measures the number of ounces of silver value in each ounce of gold value.
• The relationship dates to the first Egyptian Pharaoh Menes, before 3,000 BC, who declared one part gold equal to two and one-half parts silver.
• Most recently, the ratio peaked at 96.5 ounces of silver value in each ounce of gold value.
• On April 15, the ratio stood at 82.5:1, as silver has outperformed gold on a percentage basis, falling from the 90:1 level in late February 2024.

 The leading gold and silver bullion ETFs

• Three leading gold ETF products holding physical gold bullion are GLD, IAU, and BAR.
• The top silver ETF that holds silver bullion is SLV.
• GLTR holds physical gold, silver, palladium, and platinum bullion.

 The leading diversified gold and silver mining ETF products

• GDX and GDXJ own shares in the leading publicly traded senior and junior gold mining companies.
• SIL and SILJ own shares in the leading publicly traded senior and junior silver mining companies.
• The mining shares tend to move higher and lower with gold and silver prices.

While gold’s bull market celebrates its quarter-of-a-century anniversary in 2024 and is trading at a record high, silver remains significantly below its 2011 $49.82 high and its 1980 $50.36 record peak. Critical long-term technical resistance in silver is at the early 2021 $30.35 high, which could be a gateway for a challenge of the 2011 and 1980 peaks. A move over the $30 level could cause a herd of trend-following buying to descend on the silver futures market.

Thanks for reading, and stay tuned for the next edition of the Tradier Rundown!