This will be the last mid-month technical analysis of gold and silver prices before the US Presidential election. And not only that – it’s also the last analysis prior to an important summit meeting of the BRICS nations in Russia, which is scheduled for next week (October 22nd, to be precise). So, that’s two major events that could significantly impact the prices of gold and silver. Therefore, I’ll be very interested to see where prices are this time next month, in comparison to where they are now.
Technical Analysis of Gold and Silver Prices - October, 2024
The per ounce price of gold has continued to rocket above the most recently revised price projections of many precious metals market analysts. I get a kick out of reading where some major bank revised their highest price projection for gold this year to $2,600 an ounce – and then seeing gold trading around $2,650 just a few days later.
Silver prices haven’t yet joined gold prices in the stratosphere. However, silver is showing increasing strength as it maintains price levels above $30 an ounce. The bullion banks haven’t stopped smashing silver prices down, but their most recent efforts have seen silver bounce back upward both more quickly and more firmly. I daresay that any hopes the bullion banks may have of being able to close out their massive short positions back down around $25 an ounce or lower are nothing more than opium pipe dreams.
Historically, gold and silver tend to finish the year strong, moving up from October into December. September, which is usually a bit of a down month, went against historical tendencies this year, as gold and silver prices enjoyed a nice advance to the upside. It’s usually a good sign for bulls when prices move higher even during timeframes when they’ve seasonally tended to fall – so I’ll take September’s performance as yet another bullish indicator for the precious metals.
(The UsualNote: I’m writing this monthly technical analysis on Tuesday-Wednesday, October 15th-16th. Any significant price action, up or down, that has occurred since that time should be taken into consideration as you do your own market analysis. The UsualDisclaimer: The technical analysis presented in this article is purely my perspective on the market, which is sometimes brilliantly on target…and sometimes abysmally off the mark. Therefore, as ever, I urge all investors to perform their own due diligence and market analysis. My monthly technical analysis is offered only as one take on the market for you to consider.)
All right then, let’s take a look at the past 30 days of price action in gold and silver, and see what we can see with a review of the daily, weekly, and monthly futures price charts.
Technical Analysis of Gold – Most Recent Price Action
I plan to review gold prices today – on October 15th – and then look at silver prices tomorrow – October 16th. Okay?
Let’s start off by taking a look at the daily gold futures chart, and proceed to –
Review gold’s price action over approximately the last month of trading
Check the current gold price in relation to a couple of primary technical indicators - specifically, the 20-day and 50-day exponential moving averages
(Yet another customary note: My monthly technical analysis is done using the nearby COMEX futures charts. There is, of course, normally a slight difference between spot prices and the most nearby futures prices. Currently, nearby gold futures prices are about $15 above current spot prices for gold, while nearby silver futures prices are approximately 20 cents higher than the spot price of silver. Those are more narrow spreads than was the case last month, when gold futures were about $30 higher than spot, and silver futures prices about 30 cents above silver’s spot price.)
Gold futures price September 16th: $2,609 Gold futures price October 15th: $2,667
Well, just a quick look at those two numbers tells us that gold has had a good month, moving more than $50 an ounce higher in price. Over the past month of trading, gold futures scored yet another new record intraday high, at $2,708, and another record high close, at $2,695 (well, technically, $2,694.90, but let’s not quibble over a lousy dime).
After hitting those new record highs, gold prices pulled back a bit over the next couple of weeks, dropping down to about $2,625 an ounce, right around the 20-day exponential moving average (blue line on the chart). Gold gapped higher last Friday, October 11th, and looks poised to again challenge its all-time high.
The 20-day EMA has continued acting as a price support line that gold has time and again bounced off of, back to the upside. Going back over the last several months, there have been a few dips below the 20-period moving average, but they’ve been very short-lived – usually just a couple of days. And, as I noted last month, the 20-day moving average line resembles a nice, steady upsloping trend line that you might have drawn.
That 20-day moving average line currently sits at about $2,650. It’s made an even bigger advance than gold itself, moving up by over $100 from where it was this time last month, back down around $2,550.
Here’s the daily chart with the 50-day EMA applied (still shown with the blue line). I’m showing the 50-day moving average on the daily chart for two reasons –
You can see that price action has basically continued to maintain its position at price levels well above the 50-day moving average – which indicates a continuation of a strong bull market
I think that, should we see a significant downside correction, the 50-day EMA, which is currently around $2,585, may be a more likely stopping point – price support level – than the 20-day moving average, which is only about $20 below the current gold futures price
Like the 20-day moving average, the 50-day moving average for gold has advanced by approximately $100 over the past month. It was sitting around $2,485 a month ago.
I like the look of the MACD on the daily chart. Even though gold has gone significantly higher, the MACD signal line and the MACD histogram are actually still in negative territory – but look to be curling back to the upside. So, the question arises, “Gee, if gold prices go up $50 an ounce or more without strong upside momentum, how much higher might gold go with a resurgence of strong bullish momentum?”.
In short, the daily chart continues to show a strong, persistent overall uptrend in gold prices.
Long-term Technical Analysis of Gold
Okay, let’s broaden our time horizon and take a look at the weekly gold futures chart - which goes all the way back to early 2023. Applying a 20-week EMA to the chart again shows us a solid price support line that has been steadily moving upward since October of last year. The 20-week moving average is currently around the $2,520 price level.
Gold’s advance looks perhaps even more impressive on the weekly chart than it does on the daily chart. There haven’t really been any major downside corrections – just fairly minimal price consolidation around the $2,300 level, which occurred from April to July of this year.
The MACD, on the weekly chart, shows the MACD signal line indicating strong upside momentum and the MACD histogram just slightly bullish. Might we see a corrective retracement to the downside that levels out the MACD? Sure, that’s possible – but I’m betting against it, based primarily on gold’s historical tendency to finish the year strong.
Gold – Monthly Chart
The monthly gold chart – showing the price action all the way back to 2017 – is perhaps the most impressive one for precious metals bulls. We’ve had, if we discount the one relatively flat month of June, eight straight months of the price of gold moving substantially higher.
The blue line, 12-month EMA looks a lot like the moving average lines on the daily and weekly charts – that is, showing a firm, sustained uptrend – one that, on a monthly basis, started in late October of 2022. The 12-period moving average on the monthly chart has now gotten up to about $2,370. That’s, notably, about $70 above where the last long-term price consolidation occurred, around the $2,300 level.
Both the MACD signal line and the MACD histogram on the monthly chart are reflecting the strongest bullish momentum that we’ve seen over the past several years. Are they about to roll over to the downside in an extended downside correction – or are they just going to continue inching higher? The extremely high levels – especially with the MACD signal line – favor a turn back downward, or at least a flattening out. However, I made that point in both my August and September technical analysis reviews – and both indicators have, since then, just continued to show increasing upside momentum. I’d say that argues against any significant, extended downside move on the monthly chart.
Should the market experience an extended downturn, one might look for gold to possibly find support around the level of a 50% retracement of the move up from around $2,000 an ounce to $2,700 an ounce. That would be close to the 12-period moving average line, which, as noted, is currently around $2,370. But I’m actually pegging pretty solid support back up around the $2,500 level. Perhaps a more likely long-term retracement would be a Fibonacci retracement of approximately 23.6%, which would take the market price back down to around $2,525-$2,550.
Silver Breaks Out! – Most Recent Price Action
Okay, so why am I saying, “Silver breaks out!”? Because, by once again moving decisively above the $30 price level, scoring both closing ($32.46) and intraday ($33.22) highs above the previous July highs, and snapping back sharply to the upside after yet another smackdown by the bullion banks, my not-so-humble opinion is even stronger now that $30 an ounce is firmly the floor for silver moving forward.
I was particularly impressed with the way that silver held up under the latest smash attempt by the bullion banks. In both of the previous two concerted short sell attacks on silver, the sellers were able to drive the price back down substantially below the $30 level. But that wasn’t the case in the latest assault on silver prices. In fact, they didn’t even manage to knock the price of silver all the way down to $30 an ounce – much less anywhere below it - before silver spiked back upward and scored those new recent highs.
A look at the daily silver futures chart shows silver continuing its pattern of weaving back and forth across the 20-day exponential moving average while, overall, steadily advancing higher. It’s gone from $27 an ounce in early August to around $32 an ounce today. It has also, like gold, defied seasonal tendencies to experience a price decline in September – instead, enjoying one of its strongest months.
Silver futures price September 3rd: $28.34 Silver futures price October 16th: $32.27
I wrote last month, “I think it will be a significant bullish sign if the 20-day moving average can follow price and move above the key resistance level of $30 an ounce.” Well, it’s solidly done that. The 20-day EMA, which was at $29.42 on September 16th, has now shot all the way up to $31.40.
The MACD on the daily silver chart shows both the MACD signal line and the MACD histogram just beginning to turn back to the positive side. In other words, silver may just now be beginning to gain bullish momentum that could send the price of silver substantially higher.
I also like the look of the 50-day EMA on the silver futures chart (shown below), because it, too, has moved up above $30 an ounce – currently sitting around $30.62. And note how the most recent silver smackdown was just barely able to touch that 50-day moving average line before silver once again reversed back to the upside.
Long-term Technical Analysis of Silver
On a more long-term view, I also like the look of the weekly silver futures chart with the 50-week EMA applied to it. As with the daily chart, the bears could only just barely manage a tap of the 50-period moving average before silver prices took off again to the upside.
Looking all the way back to April of this year, the weekly chart shows silver moving up and down across a price range from roughly $26.50 to $31.50. Silver is currently challenging the upper end of its trading range of the past six months. Over the past month, the 50-week moving average has moved up from $27.25 to $27.95.
The MACD on the weekly chart also shows encouraging signs of higher silver prices. The past month’s price action in silver has turned the MACD histogram and the MACD signal both to the positive side, but still with plenty of room to run in the land of bullish momentum.
Silver – Monthly Chart
All right, let’s wrap up our monthly review of silver prices by looking at the monthly chart. As usual, I’m using a 12-month moving average on this chart, which currently shows price action all the way back to 2017.
Well, it looks good to me. The month of September scored new intraday and closing highs above the previous highs made back in May. And October’s price action has already notched a higher intramonth high over September, and looks like it may end up making a new monthly closing high above those May prices.
The 12-month EMA has moved up, over the past month, from $27.30 to $28.20. That puts both the 50-week moving average and the 12-month moving average solidly above the $28 an ounce level. Also, as was the case last month, both of those moving averages are close together, which indicates some solid price support there.
Both the MACD signal line and the MACD histogram continue to show increasing bullish momentum on the monthly chart.
Technical Analysis of Gold and Silver Prices – October, 2024 – Conclusion
Before I try to sum things up here from a technical analysis perspective, I want to make a couple of quick notes.
I continue to watch the gold-to-silver ratio – which I expect to eventually drop down to a much lower level, say, 50-1 or lower – for an indication that silver is revving up its engine, getting ready to really fly. The ratio is currently at about 84-1 – essentially around the same level it was this time last month. There’s still that double top in the ratio at about 90-1.
As noted, the seasonal tendency is for gold and silver to finish the year, from October through December, on an upswing. It’s holding true to form thus far.
All right, let me try to sum up where I see things sitting technically at the moment. Based primarily on looking at the daily chart, I see three nearby support levels for gold –
Gold Support Price Levels
$2,625 – the low of the most recent pullback
$2,575 – to fill a gap left on September 13th
$2,525 – price level where price consolidation occurred August-September
As far as technical resistance levels, the logical ones at this point are –
Gold Resistance Price Levels
$2,750 (again, just included because it sits halfway from $2,500 to $3,000)
$2,800
$3,000
WAY higher 😊
I’m moving up the price support levels I see for silver about a dollar from last month’s levels –
Silver Price Support Levels
$31
$30.50
$30
Sure, silver could get knocked back down below $30 an ounce, especially on just an intraday level, but I wouldn’t expect any move below that $30 level to dip very far or to be maintained for more than a day or two.
I’m pegging the nearby price resistance levels for silver as follows:
Silver Price Resistance Levels
$32.50 – approximately the most recent closing highs
$33 – about the recent intraday high
$35 – the logical next stair step in a march toward $50 and higher
I could be wrong (but let’s pray God that never happens), but it looks to me like the forces attempting to keep the price of silver suppressed are getting weaker and weaker. I’d guess there are some bullion banks that have massive naked short positions in silver that are sweating blood right now as they look for a way out that doesn’t involve bankruptcy.
This month’s technical analysis review indicates the long-term bull market in gold and silver is still intact – and possibly gaining momentum as gold continues to score more new record highs, and silver shows increasing resistance to getting beaten down.
As of Wednesday, October 16th, that’s how the precious metals market looks to my bleary eyes.
What Impact is the US Presidential Election Likely to Have on Gold and Silver Prices?
Hmm…let me see…what’s my answer to that question? Okay, got it: I don’t know. There are just too many variables to take into account. Other factors that could significantly affect gold and silver prices, regardless of the election outcome, include the geopolitical tensions in Russia-Ukraine and in the Middle East, and central bank gold buying. Price action between now and then could also have an impact. For example, if gold and silver prices have both shot significantly higher between now and the election, then there might be a purely technical price correction to the downside around that time.
History doesn’t appear to offer us much insight. During both Trump’s Presidency (pre-COVID) and Biden’s Presidency thus far, gold prices rose by approximately 30%.
The long-term fiscal policies of Presidential administrations are more likely than the election itself to have a substantial impact on gold and silver prices. So, what might those policies be for each of the candidates?
Well, it looks rather like both Trump and Harris may, by their policy decisions, drive precious metals prices higher over the course of their term – although for very different reasons. If Harris becomes President, then we can likely expect “more of the same”, which would include extending support of Ukraine in the conflict with Russia, and domestic fiscal policies that have fueled high inflation throughout Biden’s Presidency. Trump, on the other hand, would be more likely to successfully defuse tensions in the Middle East and in the Russia-Ukraine war. However, aggressively punitive tariff policies he may follow could accelerate the global de-dollarization movement and possibly even help to collapse the current global fiat currency system. So, either candidate looks poised to make moves that could push gold and silver higher over the long term.
Overall, it seems to me that the broader, more fundamental forces on a global scale – continuing economic and political uncertainty, and the continued rise of China-led economic alliances moving away from the US dollar – are more likely to drive prices than the specific policy moves of the US President. And those broad fundamental forces probably continue driving precious metals prices higher.
But, again, there are just too many variables to consider. So, what impact will the US Presidential election have on gold and silver prices? – Ask me on November 6th. 😊
If there is a noticeable, immediate, morning-after movement in gold and silver prices, I’d expect things to break as follows:
Harris wins: Gold and silver higher, based on fears of continuing high inflation
Trump wins: Gold and silver lower, based on (probably misguided) thoughts of a stronger US dollar
Thanks always to our friends at TradingView.com for their terrific charting services, which make my job easier (and I’m always in favor of that).
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