For the benefit of holiday gift buyers that may happen to be doing some Cyber Monday shopping, I’m going to make it short and sweet so you can get back to looking for great bargains. 

Following is a two-minute read breaking down the major elements that are impacting and are going to impact the gold (GCG26) and silver (SIH26) markets over the next few weeks. Here goes…

More U.S. data coming out, and catching up. Last week saw a barrage of U.S. economic data releases, with government agencies trying to get caught up after the weeks-long U.S. government shutdown. The takeaway from all that data last week, which was a mixed bag, is that nothing moved the needle on expectations related to the Federal Reserve. Traders and investors are once again betting that the Federal Reserve will cut U.S. interest rates when policymakers meet next week (Dec. 9-10), with markets signaling a roughly 80% certainty of a quarter-point Fed rate hike. 

“The shift in U.S. interest rate sentiment started after the delayed September U.S. jobs data and was reinforced by comments from New York Fed President John Williams and San Francisco Fed President Mary Daly. Fed Chair Jerome Powell and his allies are ‘on board with a cut,’ despite pushback from other officials who are more concerned about inflation, and recent soft economic data is expected to convince the rest of the committee,” reported Bloomberg last week. That’s bullish for gold and silver and probably at present the most bullish element for the two precious metals markets.

Risk aversion in the marketplace recedes. The past month had seen the U.S. stock indexes get very wobbly. In late November the stock indexes hit multi-week lows due in part to worries about an artificial intelligence bubble and private-credit sector stress cracks. That drove better safe-haven demand for gold and silver. However, the past several trading sessions have seen strong rebounds in the U.S. stock indexes, to suggest they have put in near-term market bottoms. It appears the annual “Santa Claus rally” may be kicking in for the stock markets. That’s bearish for the safe-haven metals, from a competing asset class perspective. 

However, as we’ve seen this year, gold and silver, and the U.S. stock indexes have traded in tandem — as most recently seen from all those markets trending higher from August to late October.

Better U.S.-China relations… The charm offensive presently occurring between U.S. President Donald Trump and China President Xi Jinping is bullish for the precious metals markets. Smoother trade relations, following a heated trade war between the world’s two largest economies, are bullish for metals markets because they suggest better economic growth for both countries and even other major countries. That would mean better consumer and commercial demand for metals around the globe.

The Bottom Line: Silver Is Still the Key 

I’ll repeat that I’m still overall bullish on gold and silver, based on the bullish longer-term technicals still in place. Also, the shorter-term technical postures for both metals markets have improved over the past few weeks. 

Importantly, silver prices on Friday hit a record high and are back well above the key psychological level of $50.00 an ounce. That’s a big deal for both metals. Such suggests silver has entered a new, longer-term trading range at higher levels. If that’s indeed the case, gold will soon be knocking on the door of its record high scored in October — and maybe above. Hi Ho Silver… away!!

Tell me what you think. I really enjoy getting emails from my valued Barchart readers all over the world. Email me at jim@jimwyckoff.com.