A disparate week for the metals

There was a very strong disparity between Gold and Silver this week, with net weekly changes of -0.4% and +5.7% respectively. There are a fair few reasons why this disparity occurred, but broadly, both of the main precious metals look set for further broad gains into the summer.


GLD, weekly

SLV, weekly

Summary

So... Gold settled a little lower, but Silver powered upward, with the best close since June 2015.


Why did Gold flounder relative to Silver?

Partly.. renewed strength in the USD.

Partly.. further increased confidence in the US/world capital markets, as the 'everything is fine again' mantra within most market participants. This increase in confidence has resulted in Gold losing at least some of its 'fear bid'.

Silver is a more industrial metal, and when commodities are broadly rising, Silver will often outpace Gold... typically on a ratio of 1.5-2.0x.

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Regardless of the near term, Gold and Silver look bullish into the summer.

A basic upside target for Gold is $1300.. and that likely equates to Silver $16s.

A realistic target - if global market upset this summer... Gold $1400 with Silver 18s.

Best bullish case... Gold $1500, with Silver $20.

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If the metals do rise.. the related mining stocks will follow - as has been the case since Dec'2015.