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Are gold and silver about to rise?

Today we will look at gold and silver after some time. We will mostly look at long term outlooks for both of these metals. Both commodities have been moving sideways for a while and show no real trend. Past couple of days however showed a change in this sentiment.

General outlook

As you can see from the charts, both of these commodities bottomed around March of 2021 and rose significantly months after that. These two commodities were first to move back up after the sharp declines. However, for some reason, both of these commodities stopped their price increases and started to move mostly to the side.

Most investors are worrying these days about inflation. For instance only in the US, the inflation is at 7.5%, the biggest in 40-years. Gold and silver have been an inflation hedges for quite some time and are considered safe have assets. This sentiment prevails even after  performance of these two assets last year, which was far from optimal.

Gold

Gold has seen its top in august 2020, and since then it is mostly moving downwards and sideways. When looking at the long term chart, we can see a large triangle. Yet, last few days have seen an increase in the price of gold, which, however, is not that surprising. The price increase can be expected mainly due to these three reasons:

1.The expected interest rate hikes by Fed

2.Huge inflation levels

3.Geopolitical uncertainty around Russia-Ukraine situation

Putting all of this together, gold can benefit from all this uncertainty. It is the times of chaos and instability, when investors are mostly moving their capital into asset like gold. Really important price level for this commodity is going to be 1 910 USD. If this level is broken, there is a huge chance that the price rise is going to continue.

TradingView Chart

1D chart of Gold, Source: Author´s analysis, tradingview.com

Silver

Silver is in similar situation since it has been moving to the side for few months now. I also expect a bit more from this commodity in terms of price movement in the near term, but the overall structure of silver is a bit more complicated. It is moving in a very big range with a first important level around 24.59 USD. If we can break this level, we can create a higher high and the uptrend can continue.   

TradingView Chart

1D chart of Silver, Source: Author´s analysis, tradingview.com

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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