For the past few weeks, we have been long Gold and Silver looking for a breakout to the upside. We are now seeing the expected breakout to the upside as Gold blew through 1800 and now looks like there could be a run at the highs. The next major target is 1850 based on June Futures.
Silver has joined the party breaking through the 27.00 level and appears headed to the next major level of 28.00 based on July futures. The congestion pattern Gold and Silver have broken out of can be very explosive and should provide a continuation of the rally.
Obviously, this could change, and trends can reverse, however we believe that the rally is in the infancy of what we expect. Looking at the commodity space in general we are seeing explosions higher everywhere. The FED’s inability to recognize inflation can only propel the metals higher.
We will be looking to buy pullbacks and support levels until this pattern changes. The bullish trend looks powerful and should lead to a continuation of the current rally. We are looking to add aggressively and expect sell offs to add. As always do not overleverage only trade and invest with risk capital.