The rally has been amplified by aggressive call-option buying and a weaker-rate backdrop, with silver now sharply outperforming gold despite growing warnings of blow-off-top risk.
Crash or sell off will be there (in gold and silver) if and only if the price trades below key support for a minimum of thirty-six consecutive trading hours.
Even if gold miraculously consolidates high again out of multi-decade extremes, it likely faces much more drifting and considerable selling back into the lower quartile of its range.
Any time a market starts moving like the silver market has lately, there's potential for downside volatility. You get hot money piling in that didn’t even know how to spell the word silver a week ago.
Ira Epstein covers the recent Federal Reserve decision to implement a dovish cut by initiating a $40 billion monthly purchase of short-term treasuries.
In a nutshell: gold can go higher, but it’s moved up tremendously in a relatively short (and joyous!) time. If it goes higher, the investor is very happy. If it dips significantly, more can be bought.
Ira Epstein highlights the recent performance of gold, noting its dramatic rise despite being down for the week, and examines the gold-silver ratio, which shows silver gaining strength.
