Gold Hits Our Final Target, So What’s Our Next Move? Silver
When the market hands you a gift, you count your blessings and move on. That means a new trade setup — not for gold, but for silver.
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The gold rally of 2024 continues unabated. It’s amazing that less than three weeks ago, we created a setup for gold that has already reached our ultimate target.
Thanks to a boost from Friday’s non-farm payroll figure, which came in much higher than expected, our trade reached its ultimate target of $2,325 (point D) just two weeks after our initial recommendation. Spot gold continued to rise to $2,353 on Monday of this week.
We weren’t expecting to reach our goals so quickly, but when the market hands you a gift, you count your blessings and move on. That means a new trade setup - not for gold, but for silver.
As is often the case, silver has lagged behind gold during its recent rally. This could be because retail investors, who are experiencing FOMO (fear of missing out) on gold’s surge, are piling into the lower-priced metal in the hopes that it follows suit.
Regardless of the reasons behind the move, silver has experienced a solid breakout.
On its weekly chart, silver has vaulted past a resistance level near $26 (red dotted line) that has held the metal in check for years. A series of false breakouts have occurred at that level over the past two years (green arrows).
The current breakout is no fake-out, as silver has shot well above the heights reached during those failed excursions.
I’ve set my entry at $26.25 (green), in the hope that a pullback close to the breakout point might occur. My stop is located at $24.25 (red), which places it beneath the April 1 low.
Zooming out to the monthly chart, we see a series of wicks that occurred during the pandemic (point A). These wicks terminate in the $30 area, so we’ll place our initial target below those highs, at 29.75 (blue).
Going back to 2012, there are a series of wicks that terminate in the $35 area (point B). We’ll place our ultimate target a bit lower, at $34.25 (blue). As with the gold trade setup, our potential gains are considerably larger than our risk.
Regarding gold, it could certainly move higher from here. Just because our targets have been hit doesn’t change the fact that gold still has upside potential. However, the current risk/reward proposition in silver is more attractive in my view.
At the time of publication, Ponsi was long silver.
