Last Friday, I flagged Palladium’s uptrend as climactic and that gold may take over as the leader of the sector (here).
This is exactly what happened over the last two sessions. Gold surged from its near-term support at $1,280 to break the $1,300 resistance; while Palladium is still glued to its multi-week support at $1,320. Silver even outperformed Palladium (see below).
What’s going in market that propelled gold to new multi-month highs? One reason could be the rise in risk aversion, ie ‘risk off’. Many US stocks plunged this month – such as Nvidia, Intel, Tesla – because of lower-than-expected earnings outlook. Meanwhile, the global macro outlook has not really improved significantly in January.
Therefore, I would expect gold to extend its rally into the $1,320 region (parity with Palladium); and Silver to test the $16.00 round number level soon.
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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.