Gold & Silver Begin The Move To New All-Time Highs
Gold & Silver Begin The Move To New All-Time Highs from Commodity Online
We warned about this move many months ago and just 6 days ago we issued a research post suggesting Gold had cleared major resistance and would start a rally mode to push above $2000 – possibly above $2100. Well, guess what happened right after we made that statement? Yup – Gold started to rally higher and is currently trading near $1790 – about to break $1800 for the first time in 2020.
HOW WILL GOLD REACT IN THIS PARABOLIC RALLY?
What we really want you to focus on is the fact that Gold is rallying to levels above $1800 (near all-time highs) while the US stock market has entered an upside parabolic price trend. What does it mean when metals are rallying and the stock market is rallying at the same time? The supply-side of precious metals has been restricted because of the COVID-19 virus event and central banks have been accumulating Gold and Silver over the past 7+ years by large amounts. This suggests central banks and precious metals traders believe metals prices will continue to skyrocket while the risks to the equities markets, credit markets, and global economy increases.
Gold prices climbed in the early 2000s after the DOT COM bubble burst (starting to rise in 2002). The US stock market eventually bottomed near April 2003 – yet Gold continued to rally from near the $281 level to $992 in early 2008 – a massive +665% over just 5 years.
Gold continued to rally after some wild rotation near the 2008 peak in the US stock market. Gold bottomed in November 2008 near $710 before rallying to $1924 in September 2011. This rally took place while the US stock market was also rallying because of the fear in the market from the 2008 (and 1999 DOT COM), market collapse events had not subsided. Traders and Investors were still very fearful of the truth of the economic recovery and stock market recovery at that time – so they continued to hedge in precious metals.