When commodities develop a bid over a period of many months that bid doesn't simply dissolve into a puddle and go away. The technically driven nature of commodities, in particular, gives weight to price moves that develop structure. The structure of the move reinforces the price trend over the long-term.
This is exactly why the price trend developing in gold and silver should be taken seriously by investors. While it is by no means a guarantee, there is growing evidence from both a technical and fundamental view that we are still very early within a secular uptrend in metals that could last years.
Fundamentally, the most obvious issue is with the perpetual nature of QE that has become a religion among the central banking crowd in the U.S., Europe and Japan. The deficits that are being generated are a guarantee of future currency debasement.
Further, the role of central banks within the economy seems to be changing from an opponent of inflationary economics to a proponent of inflationary economics. This is a massive fundamental shift in the function of the Fed as a defensive weapon to what is now an offensive weapon for the economy. There is no possible means of the Fed being offensive without sacrificing their balance sheet and thus, the currency.
Technically, we are seeing breakouts of multi-year trajectory points that have very significant historical weight. Silver just joined this festival of jubilant price dynamics by breaking through a multi-year trajectory yesterday and following through with a high volume confirmation today.
This type of positive fundamental and technical whirlwind won't disappear overnight, by any stretch. In fact, gold and silver are both set to thrive over the long-term with an acceleration in the price trend as the secular bull market is reinforced in the virtuous cycle for metals to come.
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