Mixed start for gold and silver

The precious metals of Gold and Silver saw net January changes of -$44.80 (2.4%) to $1850.30, and +$0.50 (1.9%) to $26.91 respectively. The mid term trend in gold and silver remains bullish, with both metals sporting price structure of a multi-month bull flag.

Gold, monthly1b

Silver, monthly1b

Summary

Gold: Gold printed $1962.50, but cooled back to settle the month $1850.30, just fractionally below the monthly 10MA. For now, price structure is still a valid bull flag. The July 2020 break above psy' $2K offers a grander target of the 2400/500 zone, which appears realistic as early as late summer.

Silver: A second consecutive net monthly gain, with a January high of $28.10. Soft target is the Aug'2020 high of $29.92. Any price action >psy'30 would be decisive, and offer a fast run to the 35/37 zone, which appears realistic as early as April/May.
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The Gold-Silver ratio stands at 68.75. Grand target are the 32s, which looks feasible before end 2021.

Gold and Silver bull flags

The precious metals of Gold and Silver saw net December gains of +$114.20 (6.4%) to $1895.10, and +$3.82 (16.9%) to $26.41 respectively. Gold was net higher for the year by +24.4%, with Silver +47.4%. The mid term trend in gold and silver is bullish, with both metals sporting price structure of a multi-month bull flag.

Gold, monthly3

Silver, monthly3

Summary

Gold: The December gain fully negated the November washout. The year end settlement back above the monthly 10MA ($1825) is a distinct positive. The July break above giant psy'2K offers a grander target of the 2400/500 zone, which appears realistic as early as late spring/mid 2021.

Silver: The December gain negates much of the decline since September. Old resistance of the 21/20s, has acted as new core support. M/t bullish, with next target of 35/37, which appears realistic as early as April/May 2021.
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With silver having broken above the decisive $22s this past summer, the bold will now be leaning toward Silver, which should outperform gold into and across 2021. 

The Gold:Silver ratio stands at 71.75.

 

Big ratio target are the 32s, which really isn't that bold by end 2021. Again, this doesn't mean gold will be net lower, merely that silver will likely outperform... typically by a factor of two. Indeed, if you believe Gold $3K, then its arguable that Silver could be expected to be close to $50.

Finally, gold and the dollar...

Ongoing weakness in the USD remains an inherent upward pressure on gold and silver. I would note the importance of the DXY 88s. Any price action in the 87s would merit alarm bells, and would likely see gold and silver accelerate upward.