February Newsletter 2024

In our December 2023 newsletter, we were anticipating a year-end close above $1,970, making the case that the price of gold would see new highs in the coming months and years. We certainly achieved that, with gold closing at $2,063. Furthermore, the price of gold remained above $2,000 per ounce for nearly three months uninterrupted. Both of these indicate the formation of a long-term base. Stubborn resistance ($2,000) turns into support. Rather than a magnet that repels buyers as it is approached, it attracts them when it dips below. That is the change we seem to be seeing unfold now.

The $2,000 level has been breached more than once. Last week gold briefly traded below $2,000 only to quickly rise above it again. Does that mean gold won’t ever again see $1,900? No. Bases will be tested, sometimes in ways that make you question if they are real. How deep the test is becomes a matter of market dynamics and momentum. We expect increased volatility in all markets based on all that is happening globally, and gold will not be immune.

Governments continue to run obscene deficits, supported by central banks creating more debt-based money. Furthermore, this year will see an unusual cycle of national elections, as over sixty nations will elect new leaders. With the wide differences in governing philosophies of most major parties, there is a great deal of uncertainty regarding economic policies that will be enacted over the next several years. This is an environment where gold and silver will ultimately shine.

As far as silver goes, not much has changed. Silver is continuing to be silver. It is still biding its time within a trading range. Strong support is near $19 per ounce. It will likely make a move to test its $30 resistance area once Gold moves above $2,100. Patience has always been the key to investing in the white metal. While not for the faint of heart, the rewards can be significant.