April 2024
This month, the picture above is of gold and silver front and center. After all, they have assumed central roles in the world of investing. Early in the year, investors seemed to be waiting for a catalyst to provide some direction for these metals. Well, we've received it. In fact, we've seen multiple catalysts. Today's global events reinforce the notion that gold and silver serve as financial and geopolitical insurance.
Both individuals and nations are investing in this protection.
We wish we could say it wasn't necessary—that the outlook for the world is a return to more 'normal' times. Unfortunately, there is little on the horizon to suggest that this will be the case anytime soon, possibly for years. In times like these, we are reminded...
Here for you,
The OWNx Team
Gold and Silver
What Do the Charts Say?
Well, it needs to be repeated. What a difference two months make. Back in December, we stated that a year-end close above $1,970 would strongly suggest potential new highs in the coming months and years. The 'months' part of that forecast has definitely been confirmed. So much so that we need to zoom out to the ten-year chart to fully appreciate the strength of this unfolding movement. For well over a decade, the price of gold has been forming what is known as a cup and handle pattern. This is a bullish chart pattern when it develops over several months. But over a decade? We couple that with a surge to new all-time highs after breaking through a four-year resistance band between $1,950 and $2,100. This ten-year chart unmistakably shows that we are in uncharted territory.
In last month's newsletter, we noted that former resistance levels often become long-term support, and these levels are frequently tested. In this scenario, that would bring us back to the $2,100 range. Does this guarantee it will happen? No. But is it possible? Yes. We’ve said it before, and we’ll say it again: Dollar-cost averaging and buying the dips are fundamental to this platform. Given the serious nature of the current economic and geopolitical climate, any dips could be shallow. At the same time, short-term traders might see any positive developments as a cue to sell, potentially causing a swift drop. Either way, increasing holdings in this market now is likely to pay dividends in the years ahead.
As for silver, we're finally seeing some activity. It is making a push to break out of the $30 resistance level. Whether this happens now or later, we will soon find out. If it doesn't, it seems likely to remain in the wedge pattern it has formed, coiling for its eventual breakout. As depicted in this ten-year chart, should gold surge toward $2,500 and beyond, silver could quickly catch up to its all-time high. That's just how it behaves. Stay tuned. It's going to be an interesting journey in these metals for the foreseeable future, marked by a clear upward trend.
Gold in today's world...
Gold price rises as geopolitical tensions mount, despite higher US yields
This article takes a shorter-term approach to technical analysis. We thought we'd include it as we generally focus on the long-term.
Investors flock to US dollar, gold as Middle East tensions escalate
"As Middle East tensions heighten, investors gravitate towards the safety of the US dollar and gold, driving major currencies to yearly lows and gold prices to all-time highs. Discover more about this recent flight to quality." Confirming many reasons why we believe what we do.