The fall in gold in November below $1800 was due to easy availability of physical gold for comex December future expiry and nothing else. In April and May of this year gold price rose due to lockdown induced supply squeeze. The reverse happened in November. Vaccine optimism resulted in reduced investment allocation to gold. Net outflows from gold ETF and built up in short positions in comex futures also added to gold price sell off.
Silver would have crashed a lot more but was saved by the best month in a decade for industrial metals. Copper and zinc were the leaders. The untouchable aluminum also rose. Nickel and lead were underperformers in the rise of industrial metals in November.
Momentum is still bearish for gold and silver. These are great long term investment opportunities in gold and silver. If you have yet to invest in gold and silver, then start investing. 70:30 should be the ratio Gold: Silver if the investment period is two years. 50:50 should be the ratio of the investment period is four years and more. However gold can be vulnerable to ten percent correction in the next six months. Silver can be vulnerable to fifteen percent correction in the next six months.
The Federal Reserve and other central banks have started taking liquidity increasing measures for December and early January. These measures are bullish for gold and silver.
Traders are factoring in good US jobs numbers in November. Focus will shift to the economy and economic outlook for the first quarter of next year. Everything will move on the economic outlook. Vaccine related news will soon be history. Focus will be on side effects of covid vaccine once it starts reaching the masses. Inflation numbers will be the key to gold and silver price for next year. Consumer price index (CPI) and producer price index (PPI) numbers will be the mover and shaker for gold price in 2021. Keep a close watch on trend of CPI and PPI numbers.
COMEX GOLD FEBRUARY 2021 – current price $1788.30
- Gold has to trade over $1750.70 till Friday to rise to $1826.50 and $1846.20.
- Gold will see a big knockdown only if it trades below $1750.70.
- Remain on the sidelines.
COMEX SILVER MARCH 2021 – current price $2296.20
- Silver needs to trade over $2166 in December to rise to $2613.
- Silver will crash only if it trades below $2166.