Overall, the metals are still bullish, with gold doing a bit of sideways consolidation. Silver a little back and fill, while platinum is playing catch up. Keep in mind that markets don’t move in a straight line, and value is a range not an exact price.

While there’s always a lot of chatter around all commodities when it comes to Chinese demand, I think you’ll do better by focusing on the US Dollar. Whether you’re leaning towards a Fed rate cut, because inflation is easing or believe that there’s any chance that the Dollar can be replaced as the World’s Reserve Currency, it’s all about the Dollar when trading gold. So, for whatever reason, the US Dollar has come under a lot of selling pressure recently. I believe it’s more about the potential for rate cuts later this year. I cannot see any chance of the Dollar being dethroned as the “Reserve Currency”. Definitely, not by the Chinese Yuan…

So, the fundamentals are there to support precious metals moving higher. Demand from China and India, jewelry demand and ETF inflows. Central banks around the world need to hold gold and China is woefully behind in that respect, if they want to be taken seriously as a financial superpower. Dollar weakness and enough uncertainty and “headline risk” for the safe-haven trade. The reasons to own gold go on and on. Charts remain bullish and dips should be well supported. I would like to see gold hold support at $2,000. It’s certainly possible to see a retest of the $1,985 to $1,975 range though. June gold needs a close above $2,040 to spark new buying to drive prices back towards the all-time highs of $2,075. I believe that gold should easily take out those highs this year.

July silver above $25.00 is encouraging and should have any easy time reaching recent swing highs (Jan 2021) of $30.35. Silver has the greatest potential in my opinion, simply because it is so under valued versus gold. Silver to gold ratio is 79:1. Gold is approaching all time highs while silver is roughly 50% of all time highs. Globex Micro-Silver is a great contract to get started trading. Pay attention to this market because it moves fast.

Platinum is also playing catch up, on its way back to the January swing high of $1,100. A close above $1,100 should encourage a run towards $1,200. The spread between gold and platinum is currently around $925. That spread is too wide in my opinion. Something closer to $500 spread is not out of the question.

Gold is not overpriced. I think that gold will trade above $2,100 this year. I see silver and platinum as being under valued versus gold.

Gold Chart

Silver Chart

Platinum Charet


The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.

800-826-4124312-373-5301Series 3 Licensed

Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
Read More