(Kitco News) – The gold market could also be struggling to search out sufficient bullish curiosity to push costs into new territory above $1,800, however that isn’t stopping silver from attracting new momentum.
Ole Hansen, head of commodity technique at Saxo Financial institution, famous in a report Tuesday that the silver market began the week with its finest day since early February as costs pushed to a two-month excessive above $27 an oz..
Hansen added that Monday’s worth motion in silver was a essential technical breakout for the valuable metallic. Whereas silver is down from Monday’s excessive, Hansen mentioned that it’s nonetheless holding above essential assist following its breakout. July silver futures final traded at $26.97 an oz., comparatively unchanged on the day.
In the meantime, gold costs have fallen from Monday’s nine-week excessive. June gold futures final traded at $1,787.90 an oz., down 0.22% on the day.
“Silver has proven earlier than what it could do when discovering momentum. First, nonetheless, it wants to verify the extent of assist beneath round the 26.60 space,” Hansen mentioned in a remark to Kitco Information.
Hansen added that silver is attracting new investor curiosity as the valuable metals industrial demand continues to develop.
“Rising progress expectations along with the prospect for governments supported infrastructure plans, in addition to the inexperienced transformation and reflation focus, have all helped drive a robust rally throughout industrial and platinum group metals in 2021. Silver has been caught between two chairs with the market struggling to work out whether or not the impression from industrial metals ought to maintain a much bigger sway than struggling gold,” he mentioned in his Tuesday word.
“The renewed pull from surging industrial metals will be seen via the gold-silver ratio, which has been in a downtrend throughout the previous month. From above 70 ounces of silver to 1 ounce of gold on April 1, it has since declined to a seven-week low at 66.5,” he added.
Sentiment within the silver market is dramatically completely different from gold because the yellow metallic fails to interrupt above $1,800 an oz.. Hansen mentioned that gold’s failed breakout is irritating and complicated a whole lot of merchants.
Final week, Hansen informed Kitco Information that he’s impartial on gold; nonetheless, he added that he nonetheless sees potential for gold costs to finally escape of their present consolidation sample.
“The short-term technical outlook nonetheless seems promising above $1,765, and a break above $1,800 might sign a transfer in the direction of the $1,818 and $1,833, an space that undoubtedly would start to shake out long-held pattern following quick positions,” he mentioned.
As to what’s going to propel gold costs greater, Hansen mentioned that he continues to look at traditionally low actual bond yields and better breakeven charges within the bond markets. He added that silver’s new momentum might assist to push gold costs greater.
“If silver strikes greater, I believe gold will observe like a screaming child not desirous to let go of his/her TikTok,” he mentioned.
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