So…the answer to the riddle, “What will it take to spark gold and silver prices significantly higher from their post-election doldrums?”, appears to be…

…a revolution in Syria.

It’s funny how these significant events almost always seem to occur over the weekend. I guess revolutionaries aren’t operating on a Monday through Friday work week. In any event, while I’m not generally in favor of violent uprisings in the world, I have to confess that my very first reaction to hearing the latest news from Syria Sunday was having the thought, “Well, it will be a higher New York market open for gold and silver Monday morning.” And, indeed, it was. Gold and silver prices drifted slightly lower for most of the rest of the trading day Monday, but still finished on a notably positive note, and opened higher again in New York on Tuesday.

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First, just a quick review of last month’s review before I start in on this month’s review. (Yes, I got dizzy just typing that.) Gold and silver prices, predictably, took a hit immediately following the Presidential election, as the US dollar, at least temporarily, soared higher in the wake of Trump’s win. In mid-to-late November, gold was around $2,600 and silver fell back to around the $30 per ounce price support level.

The key takeaways that I noted in last month’s post-election review were that “silver is still above the key $30 per ounce support level, and gold is still about $100 above the price of $2,500 per ounce”. And, thankfully, both of those things remain true at the moment.

(The Usual Note: I’m writing this technical analysis more or less on Tuesday through Thursday, December 10^th through the 12^th. Any significant price action occurring since then should be taken into consideration as you do your own market analysis. Aaaaand the Usual Disclaimer: The technical analysis presented here is solely and purely my perspective on the precious metals market. It might be insightful to the point of near brilliance…and it might be, well, rather more like the opposite of “brilliant”. Every investor should perform his or her own due diligence and market analysis. My analysis here is simply one man’s view of the market – namely, mine.)

All right then – let’s pull up some daily, weekly, and monthly charts and see what the price action in the gold and silver markets over roughly the past 30 days looks like. Hopefully, doing so will, as usual, provide us with some clues as to where prices may likely be headed in the future.

Technical Analysis of Gold – Recent Price Action

I’ll be reviewing the gold charts today – Tuesday, December 10th – and then move on to take a look at the price action in the silver market tomorrow – December 11^th.

Per my usual procedure, I’ll be looking at the daily, weekly, and monthly gold and silver futures charts, with a focus on – 

• The price action over approximately the past 30 days
• Evaluating the price action in gold and silver using key technical indicators – such as the 20-period and the 50-period exponential moving averages, and the MACD momentum indicator

(Yet another usual note: I do these technical analysis reviews of gold and silver using the nearby COMEX futures charts. There’s always some slight difference between spot prices and the nearby futures prices. As I’m writing on this Tuesday morning, the spread differential between spot prices and nearby futures prices is as follows:
- nearby silver futures are about 50 cents higher than the spot price
– and the nearby COMEX gold futures are trading about $25 above golds’s spot price

Gold futures price November 13^th: $2,604
Gold futures price December 10^th: $2,710

Well, that looks better already, right? Gold futures are trading approximately $100 higher than where they were around the middle of November. The price of gold, following its post-election fall, has recovered about half the distance between its all-time high around $2,800 and its recent low around the $2,575 level.

The daily gold futures chart shown below, with a 20-day exponential moving average (EMA) applied to it (as usual, indicated by the blue line on the chart), shows the price action in gold over the past month having recovered to being back above – rather than below – that key moving average.

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In fact, gold is trading near its highest level since the election. If it manages to break above that level in the near future, it could easily move on up to challenge its record high around $2,800 per ounce.

One thing I’m noting is how quickly the gold futures price, after bottoming out around $2,575, bounced back above the 20-day moving average, with five strong up candlesticks in a row. The 20-period EMA appears to have flattened out around the $2,660-$2,670 level, so that may serve as a price support level going forward.

All right, let’s switch to applying a 50-day EMA to the daily chart, and see how things look from that viewpoint. I noted in last month’s review, “Up until now, the price action in gold has been occurring at price levels that have consistently been substantially above the 50-day moving average”. The post-election drop took gold below that 50-day EMA for the first time in a long time. But we can see that now – just like with the 20-period EMA – gold is again trading above, rather than below, that moving average.

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Well, that chart looks like quite an interesting picture to me, for a couple of reasons. First, unlike the 20-day moving average, which dropped down a bit, the 50-day moving average has, essentially, just flattened out. Second, it’s sitting right around the same price level as the 20-day moving average – just slightly below it, at about $2,656. I interpret that as lending strength to a price support level for gold in the area of $2,650 to $2,670 per ounce.

Moving on to take a look at the MACD momentum indicator…well, I like the look of it. The MACD histogram is back above the zero line, and we’ve got a bullish crossover of the MACD signal line - and it’s a bullish crossover that has lots of room to run before approaching anything close to indicating overbought conditions. So, in short, it looks good for bulls, bad for bears, and that’s a picture that I always like to see.

In sum, the price action showing on the daily chart does not (thank God), at this point, appear to indicate any major long-term trend change. Overall, the gold market still appears more bullish than bearish on the daily chart. It will certainly be interesting to watch how gold finishes out 2024 and opens in 2025. I’ll be looking forward to taking a look at where the market is in mid-January.

So, let’s note some possible price support levels – the aforementioned $2,650 to $2,670 price range, along with the recent daily low close at about $2,570. By the way, that $2,575 price level is where I pegged some support for gold prices in last month’s review. And, with that said, let’s push on to take a longer-term view of gold, as reflected on the weekly price chart.

Long-term Technical Analysis of Gold

For my examination of the weekly gold futures chart, I’ll change the exponential moving average back to a 20-period EMA. So, how do things look from that vantage point?

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Well, the first things that pop out at me are the two facts that, on the weekly chart, the 20-period moving average – 

1. Wasn’t seriously violated in the post-election price drop – in fact, it was pretty much just barely tapped before immediately being followed by the next week’s price action forming a bullish engulfing candle
2. The 20-week EMA, even with the sharp price drop following the election, has actually continued to move higher (it’s currently sitting at about $2,615 – an advance of approximately $40 from where it was sitting when I penned last month’s technical analysis)

So, I’m going to pronounce the weekly gold chart as continuing to reflect a solid, long-term bull market in place. One could look further back in time and see support around the $2,350 to $2,400 price level where gold prices consolidated back in April to June of this year. But, given the fact that the recent drawdown didn’t even come close to taking out the key $2,500 price level – and that the market seems to be recovering to the upside now - I’d say it’s rather unlikely at this point that gold prices would drop back down that low any time in the immediate future.

One cautionary note comes to us courtesy of the MACD. Unlike those nice bullish MACD indications that we have on the daily chart, on the weekly chart both the MACD histogram and the MACD signal line are giving us bearish indications – not horribly bearish, but bearish nonetheless. So, what should we do with that information? – Make note of it and keep an eye on it moving forward.

Gold – Monthly Chart

All right, let’s wrap up our look at gold by taking an even longer-term view, with the monthly gold chart – which reflects the price action in gold going back over approximately the past six years, to 2017-2018. As usual on the monthly chart, I’ll change our blue line moving average indicator to a 12-period exponential moving average (because there are 12 months in a year, right?).

Gold is still trading well above the 12-month EMA, and that moving average, like the 20-week EMA, is continuing to move higher. It’s currently perched at about the $2,470 level – inching its way up toward the key support price of $2,500. So, should there be another serious downdraft in the gold market, one that takes gold prices lower than their most recent low last month, yet another potential price support range might be found somewhere in the neighborhood of $2,475 to $2,500.

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The MACD momentum indicator on the monthly chart looks a lot like it did last month. That is, the MACD signal line and the MACD histogram are still reflecting strong bullish momentum…but momentum that might be a ripe for a turn to the downside. But on that note, I’ll again repeat what I said in last month’s writeup – that I don’t give a huge amount of weight to the monthly MACD. I consider it to be a more reliable indicator on the daily and weekly chart timeframes.

Silver – Most Recent Price Action

Haha…Haha…HAHAHAHAHA! <– That’s me laughing at the bullion banks trying and, most importantly, failing, to smash silver prices back down into the 20-something dollar per ounce price range. Sorry, you evil bears, but you couldn’t get a close below the $30 price level. Oh, happy day. 😊

I must have managed to scribble a fairly decent technical analysis review last month, as I am, once again this month feeling compelled to quote from it – “…what I see as the single most important technical indicator for silver at the moment is the fact that the recent downturn has not dropped the price back below the key $30 per ounce current support/former resistance price level. The most recent price action has only taken silver prices back down to around the $30.50 level, the same price where it found support in early October”. Spot silver did get slammed down to around $29.65 on an intraday basis, but managed to close more than 50 cents higher, up around $30.25.

And about that very day, I wrote that we might see a hammer up candlestick form, with a long downside tail. That actually turned out to be precisely what happened – and silver has been pretty much recovering nicely to the upside since then.

Silver futures price November 14^th: $30.45
Silver futures price December 11^th: $32.75

So, how is silver looking on this bright Wednesday morning when I’m wishing it was Friday already? (Sorry, kids, I’m just badly in need of a weekend.)

Let’s first look at the daily silver futures chart, applying our usual 20-day exponential moving average to it.

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Well, I suppose the first thing to note is that silver is once again trading above, rather than below, its 20-day moving average. The 20-day EMA, currently sitting around $31.70, has started to turn back to the upside over the past week or so.

The other main circumstance here is one that I already alluded to – the fact that the key price support level of $30 – which has now been tested three times during this quarter, once in October and twice in November – has held up nicely. There’s actually what looks like a fairly strong price support area now that extends roughly from that $30 level up to around $30.50, which is, with just a couple of exceptions, the lowest closing price for silver futures that we’ve seen recently.

I’ve been talking about the importance of the $30 per ounce price support level for several months now. To my thinking, that support level has become stronger every time that silver bears have tried and failed to crack it. Therefore, at this point, I would consider it a major breakdown in the silver market – and a potential sign of a long-term trend change from bullish to bearish - if that $30 level were to be seriously violated. But is that a likely scenario? - Personally, I see that $30 to $30.50 price support range as being a very tough nut for bears to crack. Should silver prices fall back to that level again, that eventuality would most likely just attract a lot of buyers.

Repeating yet another observation from my analysis last month, the extremely strong supply and demand fundamentals for silver simply make it, in my not-so-humble opinion, excessively difficult for anyone to build a convincing case arguing for lower silver prices.

All right, let’s switch over to applying the 50-day moving average – which is currently sitting around $31.55, not far from the 20-day EMA – to our chart. Since those two moving averages are so close together, I’m going to pencil in a price support level for silver in the area of $31.50-$31.75.

As was the case when we were looking at the 20-day EMA, one main thing to note about the 50-day EMA is that silver is back to trading above it. Also, the longer I look at the daily silver chart, the more it looks to me like the price action, showing a strong, continuing move upward over the past couple of weeks, appears to indicate bears running out of gas and silver bulls becoming increasingly emboldened.

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The MACD momentum indicator gives us another positive sign for silver prices going forward. Both the signal line and the histogram have flipped back to the bullish side, with plenty of room to run before approaching potentially overbought levels.

Long-term Technical Analysis of Silver

Okay, let’s move ahead and take a longer lens view of silver’s price action by pulling up the weekly chart and slapping the 50-week EMA onto it.

The weekly chart of silver futures looks even more bullish than the daily chart did. The price action is still well above the 50-week EMA, which has advanced from around $28.50 last month to its current level just above $29. If the 50-week moving average gets on up to that key $30 price level, that should provide even more price support for the market there.

Once again (okay, I promise this is the last time but, apparently, I was really hitting on all eight cylinders last month), I’m going to repeat a note that I made in last month’s technical analysis – “The weekly chart also doesn’t show a violation of an uptrend line that one might draw across the weekly silver lows from back in February of this year.”

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The MACD signal line and MACD histogram on the weekly chart, after both taking only a slight turn to the downside, appear to already be turning back to the upside. The MACD signal line may be lingering at potentially overbought levels, but that’s certainly not the case for the MACD histogram, which is just on the cusp of making a bullish crossover back above the zero line.

The fairly obvious bottom line from looking at the weekly silver chart is that the long-term bull market for silver remains intact – and, in fact, wasn’t even seriously threatened by the post-election drop in silver prices.

Silver – Monthly Chart

Let’s wrap up this technical analysis review with a quick peek at the monthly silver futures chart, applying the 12-month exponential moving average to it.

Of course, there’s still a number of trading days left in the month of December, but at the moment, silver is looking poised to possibly form a bullish engulfing candle over November’s bearish downturn and score its highest monthly close in several years.

Silver prices are still substantially above the 12-month EMA, an EMA which, sitting around $29.31, has moved up to an even higher point than the 50-week EMA and closer still to that key $30 price support level. Putting those two moving averages together indicates more support for silver futures prices just a bit below the price of $30 per ounce.

Saying that the monthly silver chart is still reflecting a continuing long-term uptrend looks like a bit of an understatement.

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The MACD signal line and histogram on the monthly chart continue to indicate strong bullish momentum, but, again, I don’t give as much credence to MACD readings on the monthly chart as I do to the daily and weekly chart MACD.  But strongly bullish is still preferable to strongly bearish.

Gold and Silver Technical Analysis - December, 2024 – Conclusion

As I’m finishing writing up this month’s technical analysis of gold and silver prices early Thursday morning, December 12^th, gold and silver are down a bit on the day. They’ve given back about half of their gains over the past couple of weeks, but I don’t consider that to be cause for alarm – more like just normal up and down price action. Both precious metals are still trading above their 20-day moving averages.

For the year of 2024 at this point, the price of silver is up approximately $10 per ounce, about a 50% gain for the year. Gold is up roughly $700 from its 2024 opening price right around $2,000 per ounce. Trading near $2,700, gold is only about $100 off of its 2024 record high just above $2,800. At $32, silver futures are trading just $3 below their 2024 high a notch above $35. In short, an undeniably strong bullish year in the precious metals market.

The gold/silver ratio is around 84.

Here’s where I’m pegging support and resistance for gold futures:

Gold Support Price Level

1. $2,620 to $2,680 – This price range roughly covers the area between the 20-week moving average and the 20-day moving average; I’m further subdividing this range into two levels, one from $2,650 to $2,680, and the other from $2,620 to $2,650
   
   
2. $2,570 – The recent daily low close

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The only potential resistance level in sight for gold is, of course, its record high of $2,800. Above that, $3,000 becomes the next logical price target.

Now, how confident am I about a continuing bull market in silver? – This confident: I’m willing to go way out on a limb here and wager every dime I will ever earn that, by this time next year, silver will have finally scored a new all-time high above $50 per ounce. (I don’t, however, recommend that anyone else make such a reckless wager. Me, I’m just a born gambler – but I do not endorse gambling as a good way to make a living in the financial markets.) Of course, that’s primarily based on supply and demand fundamentals. From a technical analysis point of view, it’s based on my continuing belief that the gold-to-silver ratio will continue to decline.

Purely from our technical analysis review, I’m pegging support and resistance for silver at the following levels:

Silver Price Support Levels

1. $31.50 to $31.75 – This support area is gleaned from the 20-day and 50-day moving averages
2. $30.20 to $30.50 – This area roughly covers the recent lows
3. $30 – Remains a key support level

Silver Price Resistance Levels

1. $33.00 – The recent daily high
   
   
2. $35.00 – Silver’s 2024 high

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Let’s close out the year with some interesting technical speculation courtesy of The Silver Academy. In a recent article, it projected future gold and silver prices by doing calculations based on the two previous long-term bull markets in precious metals that occurred during 1971-1980 and 1999-2011. Taking the 1,493% average of the total gains realized during those two previous bull runs, the current long-term bull market price projections for gold and silver came out to – 

Gold - $43,254 per ounce

Silver - $720 per ounce

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Sure, those numbers might prove to be a bit overly optimistic, but, hey, they sound good to me. 😊

As ever and always, thanks to our friends at TradingView.com for their charting services.

Have a Merry Christmas and a Happy New Year – and I’ll see you in 2025!

• J.B. Maverick

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Sources:

https://www.tradingview.com/

https://substack.com/home/post/p-152971782?source=queue

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