Following a decline in gold and silver on Monday, technical analyst Clive Maund looks at precious metals charts to explain why he thinks now may be a good time to start adding to positions in the sector.
The sharp decline in gold and silver on Monday did not surprise us. A correction period was planned during the last gold And money market updates.
Basically, this was triggered by an easing of tensions in the Middle East. Although portrayed in the mainstream media as a failure with the absurd claim that Israel shot down 99% of Iran's missiles, the Iranian missile battery was a carefully calculated success. Not only did they manage to damage some strategically important targets, but in doing so they demonstrated that Israel's defense capabilities were not invincible.
They also managed to deplete Israel's expensive missile stockpiles and did it “cheaply” by launching all their old, obsolete hardware, some of which was little more than flying lawn mowers that took hours to arrive. It is estimated that that night cost Israel $1.3 billion in missiles, while all the old equipment used by Iran cost only a tiny fraction of that amount.
So we think this is a good time to start strengthening our positions across the industry and to do so more aggressively if we see further reactions.
Of course, the American taxpayer will no doubt be eager to compensate Israel's losses.
The end result of all this, aside from Iran's “satisfactory honour”, is that Israel is now beginning to understand that it will not get away with attacking Iran with impunity – if it tries again in size, it risks disappearing from the country. the map, because Iran has much more modern and powerful missiles in its arsenal with which to strike Israel if it decides. This realization has restored some stability and relative calm, and is fundamentally why gold and silver are reacting.
Nevertheless, the main drivers of the gold and silver bull market remain firmly in place, namely the ongoing exponential depreciation of global currencies and the imminent and complete collapse of the current financial system, which will serve as a pretext to impose the measures already prepared. CBDCs, and more recently China, have turned their attention to silver hoarding.
So, the “summary” is that this correction in gold and silver should be seen for what it is: the perfect opportunity to further strengthen positions at better prices before the next major rally.
How might gold and silver react?
In the Latest Gold Market Update$2,250 was given as a downside target for the correction, and this morning it is not that far above that, sitting at $2,307 at the time of writing.
As for money, it was highlighted in the last silver market update that it would likely react through its uptrend channel with a target of around $26.50. Well, it actually fell below $26.70 last night, so for practical purposes that's good enough.
Here are the latest gold and silver charts:
The bottom line is that the reaction in gold and silver is largely over. Of course, they could react even more, but the downside from there would be limited, while they could start to rise again at any time, especially if Israel decides to try to provoke Iran again.
So we think this is a good time to start strengthening our positions across the industry and to do so more aggressively if we see further reactions.
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Clivemaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him at the time of writing. Mr. Maund's opinions are his own and do not constitute a recommendation or offer to buy or sell any security. Because trading and investing in any financial market may involve significant risk of loss, Mr. Maund recommends that you consult a qualified investment advisor, licensed by the appropriate regulatory bodies in your jurisdiction, and make your own due diligence and your own research when making any kind of transactions. of a transaction with financial consequences. Although qualified and experienced securities analyst, Clive Maund is not a registered securities advisor. Therefore, Mr. Maund's opinions on the market and stocks should not be construed solely as a recommendation or solicitation to buy and sell securities.