After I called gold and silver’s initial price rally here, gold and silver prices have been consolidating this past week. About four and half hours from now, the US government will report jobs data for January 2020 at 8:30AM New York time, and if the data is unrealistically rosy, as I expect it to be, then gold prices may once again descend from $1,568 to $1,550 or below, and silver prices may descend from its current mark of $17.80 to about $17.50 or below. Despite the potential for a temporary setback, gold and silver prices are building up to move higher again soon.
As you can see from the below chart, silver just needs to break out above $18.50 an ounce or so, and it will be on its way higher, and silver stocks are also demonstrating the same holding pattern right now, with a break above its descending trend line likely to set off higher prices and a decent run for silver mining stocks as well. We may be days away from this move or a few weeks away, but after observation of gold and silver asset prices in response to today’s US jobs data report, I will have a much better idea of the time frame in which this will happen. Several days ago, on this blog, I wrote about why the Wuhan coronavirus will ultimately be bullish for gold and silver prices. Should the US jobs data report be unexpectedly gloomy, then the pullback in gold and silver prices will be over sooner rather than later in the above time frame.
Having lived in Asia for over a decade now, I further believe that while the hysteria surrounding the Wuhan coronavirus is being oversold by the mass media at times, I do believe that the virus is of a serious enough nature that the negative consequences of the coronavirus on the global economy outside of mainland China is being vastly undersold. To read more about this topic, as well as my opinion regarding what specific companies will likely be heavily hit by the aftermath of this virus for the remainder of this year, read my article, “The Underreported Economic Consequences of the Wuhan Coronavirus.”
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