Is the rally over for Silver and Gold?

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thebighigg18 hours ago4 min read

dreamstime.com

The past few weeks have been a lot of fun watching the silver prices shoot up the charts right into the stratosphere. But as always happens during a rally, the surge has to come to end eventually. After hitting an all time high of around $84, it has pulled back to $72 in a correction that was bound to come eventually. Have a look at the chart for the last five days:

From kitco.com

As you can see the pullback was a steep decline largely due to profit taking. It's always a smart idea to take profits on your investment along the way and no one can be faulted for that in the least. Does that mean that the silver run is over? In my opinion no. We see profit taking all the time in crypto and other markets only to be followed by more bullish sentiment in the days that follow. In reality, silver might actually be "on sale".

The shortage of silver hasn't gone away, and won't be going away anytime in the near future. There is so much industrial demand that the refiners can't keep up with it. Many big companies are inking deals directly with silver mines to buy direct from the source to avoid "middle man" fees. Don't forget that silver is inside of every computer and smart device you own, and can't be produced without it. Automobiles are also made with silver, and wouldn't run without it. X-ray films require silver as do many medical products.

The demand is stronger than ever. I believe we will see silver start to increase in price again once panic sellers are out of the market. Then those profit takers will likely buy back in a the lower price for the next surge upward. It will be interesting to see what happens in the this next week!

Gold

Gold also took a pummeling pricewise from profit taking. Again, a normal behavior when we see any asset hitting all time highs. It doesn't change the underlying fundamentals or demand for the yellow metal. Central banks are still actively buying gold around the world, and most of them have relatively low reserves at the present. They will continue to bid and buy without worrying about prices and their bids are likely being filled by this drop in prices.

Here you can see the pullback on the chart for gold over the last five days:

From kitco.com

The world is still very unstable and economies around the globe teetering on recession from debt. Europe is still very concerned that Russia might yet provoke a regional war. That of course would lead to a world war, the last thing anyone wants or needs. All of these factors will continue to drive the prices of gold upward. This might be a good reentry point for investors preparing for the next drive up the charts.

Of course keep in mind I am not a professional advisor and have been investing in precious metals since I was young. I won't be stopping anytime soon either! Gold and silver are real money and have been since the dawn of time. They aren't going away and people will continue to buy them to build and maintain their wealth. It's always a good time to invest in precious metals!

That will wrap up my post for today! I do hope you enjoyed it and please feel free to leave any comments or questions below. Thank you everyone for all of your support, I really deeply appreciate it. Have a great week everyone!

References:

Disclaimer

I am not a financial planner and this isn't financial advice. Please always do your own research before investing your money. You worked hard enough to earn it!