The divergence between gold and silver price performance and US stock market performance that occurred over the last year will accelerate in coming years. Thus all significant dips in gold and silver prices should be interpreted as buying opportunities, which is a strategy, of course, that should be a part of the best gold and silver education courses. Yesterday, gold dipped into the $1,490s range and silver dipped almost back to the $16.80 range again. To learn at what point I believe gold and silver prices will find support before continuing their climb higher, please subscribe to my free newsletter here. I will discuss a third asset, ready to breakout in price, that you should be ready to buy soon in today’s newsletter issue.
The important events this week in regard to immediate implications for gold and silver price price performance are the release of the FOMC minutes tomorrow and the end of the week Jackson Hole, Wyoming symposium in which US Central Bank Chairman Jerome Powell is set to speak at 10AM New York time. As always, the “white noise” of day to day volatility in gold and silver prices should be ignored, as often large intraday price spikes are created by HFT algorithms and are not a good indication of longer-term price trends.
A quick glance at the divergence between US stock market and gold and silver price performance in the graphic at the top of this article illustrates that a longer extended deep fall in gold and silver prices is unlikely and that gold and silver prices will likely rebound soon again. In addition, though gold and silver mining stock prices have pulled back with the recent pullback in gold and silver prices, neither are likely to break below their 50-day moving averages on a daily close basis, and if the HUI and GDX indexes approach their 50-day moving averages, any rebound off these support levels could also mark the end of this period of temporary weakness.
Finally, the ongoing ridiculous gold to silver price ratio of 88.5:1 (gold at $1,496 an ounce to silver’s $16.90 an ounce price) continue to lend support to my argument that silver, at sub-$17 an ounce prices, is an asset that should not be overlooked. Conclusion: expect the upward trend of gold and silver price performance to continue, despite any intraday and intraweek price volatility to the contrary.