Gold, silver and copper have been soaring since March lows, and they posted new cycle highs in August. They’ve seen consolidated, and metals have been trading in shor-term bearish trends and consolidative formations.
Today the fundamental situation remains bullish for precious metals. Why? Major central banks are about to introduce more easing, with the Reserve Bank of Australia (RBA) and the Bank of England (BoE) having announce more Quantitative Easing (QE) in November, while the European Central Bank (ECB) is expected to increase its bond-buying program at the December meeting.
The Federal Reserve (Fed) is also expected to act following Fed Chair Jerome Powell urging congress to provide more fiscal stimulus last Thursday. He said that the central bank is also ready to provide more easing.
More money injected into the system means more monetary inflation and a strong bulish potential. When looking at major centra bank’s balance sheets, one might wonder why gold is not above 5,000 USD already.
Global lockdowns and an expected new lockdown in the US following a steep rise in Covid-19 cases increases the chances of printing more money, and that keeps hope, and hence the equity market alive. This should provide more fuel for metals to rally.
As the Fed will debase the USD by running the loosest monetary policy to ever be introduced, gold and silver should capitalize on it and continue in their respective bull markets. We expect silver to reach 45 USD and gold 2,300 USD by the end of spring 2021.
Provided by Axiory