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.

Significant weekly gains

With the US capital market starting to get a little twitchy again, the precious metals caught a renewed fear bid, with Gold and Silver seeing net weekly gains of 1.3% and 1.9% respectively. Near/mid term outlook is bullish, with next upside targets of GLD $125 and SLV $15.60s.


GLD, weekly

SLV, weekly

Summary

Suffice to add, Gold looks especially bullish, having retraced back to the old descending resistance/trend (now support), and is starting to show some renewed upside power.

The Gold bugs just need to see the Feb' high of GLD $122.37 to be broken above, to then offer the 125s - equiv' to spot Gold around the $1300 threshold.

If the world capital markets see renewed upset - which seems inevitable (for any one of a thousand valid reasons), Gold in the $1400/1500s is seemingly probable by late summer/autumn.

Continuing to broadly retrace

Despite the weakening USD, the precious metals are continuing a short term retrace of the gains from Dec'2015-Feb'. Gold and Silver saw net weekly changes of +0.5% and -0.6% respectively. Near term outlook offers a little further weakness, before likely powerful mid term upside resumes.


GLD, weekly

SLV, weekly

Summary

It could certainly be argued that considering the weakening USD, the precious metals are actually under-performing lately.

However, it should have been clear at the start of the year, that the precious metals were catching a powerful 'fear bid'.. as world capital markets were increasingly upset for a great many varied reasons.

Considering the powerful breakout seen across Jan/Feb', it would seem very reasonable to expect once this moderate retrace is complete - within weeks, if not days, the metals will resume higher.. and at an accelerated rate.

First key upside for Gold is the $1300 threshold. Things really only get interesting with a monthly close in the $1400s. 
 
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*I am seeking to be long Gold - via GLD, and long the related mining stocks - via GDX, in the near term.