Gold & Silver Breaking Out Over Key Resistance Levels

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Gold closed last Friday at $1,899, up $57 per ounce for the week, mostly based on concerns over the Russia/Ukraine conflict. Since last Friday’s close over the long holiday weekend, Gold has traded between $1,888 to $1,916 per ounce. Gold’s price volatility is being caused by the severity of news coming out of Russia, Europe and the U.S. in regard to Russia’s political and military actions in the Ukraine.

So far this month, Gold has increased over $100 per ounce, breaking above the key $1,900 per ounce resistance level. The 2021 high for Gold was $1,962 per ounce, over a year ago, and if Gold breaks above that level, there is nothing between $1,962 and the August 7th, 2020 all-time high of $2,071.

Professional traders are no longer focused on interest rates and the U.S. Dollar Index. They are monitoring the incoming Russian/Ukrainian news. Gold could easily move above $1,900 and hopefully establish a $1,900-$1950 trading range in the short-term, or it could test the $1,850 support level. Regardless of what Gold does in the short-term, the long-term outlook has never looked better. Inflation is increasing, Global money supply numbers have gone into orbit, and safe-haven and central bank purchasing has never been higher.

Today: New European and U.S. sanctions on Russia for its aggression on the Ukraine is having an effect on a future invasion. Gold has traded between $1,893 to $1,908 per ounce today, as the world waits for what Russia will do. The U.S. Dollar Index is holding around 96, and the 10-year interest rates have dropped below 1.90%.

Silver closed last Friday at $23.96, up $0.56 per ounce for the week and up $1.60 for the month so far. With Gold in the $1,900 per ounce neighborhood, I’m disappointed that Silver hasn’t jumped above the $24 per ounce resistance level. Silver reached a high of $24.08 last week, but quickly sold-off on heavy professional short-selling when Gold sold-off on Friday. Silver has proven that its price can be explosive and any firm rally above $24 could cause a short-covering rally of $0.25 to $0.75. This year’s high for Silver is $24.72, which it hit on January 20th. The Silver-to-Gold ratio is still at an unbelievable high level of 79-to-1.

I saw a great 10-minute video on YouTube over the weekend on Silver, explaining the Silver-to Gold ratio. It’s well worth the time to watch and the link is below: https://www.youtube.com/watch?v=AJyaSeE2HII

Today: Silver took a leadership role in the middle of last night with heavy buying in early European trading. Silver saw a high of $24.43 today on inflationary concerns for energy and food products.