After a brief pause yesterday, gold resumed its remarkable rally overnight. It pushed above $4,600, gaining 1% to trade above $4,630 and notch yet another fresh record high. Gold has rallied steadily since the beginning of this year, although it took the best part of a fortnight for it to recoup the losses made between Christmas and New Year.
Nevertheless, the daily MACD is largely supportive of the current bullish run, as it indicates increased upside momentum while not particularly overbought. Many traders remain convinced that gold is heading for $5,000 or more.
They cite geopolitical uncertainty, central bank purchases, dollar weakness and the prospect of US rate cuts among the reasons why gold should continue to see strong demand. But it is worth looking at the chart and noting the two significant pullbacks in the last three months. Traders should approach with caution.
That warning for gold goes for silver, times ten. Silver has continued to outperform gold as it surged above $90 overnight, adding to the series of explosive upside moves since Friday.
Silver was undoubtedly one of the strongest performers of 2025, driven by all the positive factors behind gold’s rally, plus a few extra ones particular to silver. These include its widespread industrial uses and concerns over a serious supply shortage.
Source: TN Trader
But investors can get carried away, and the current rally looks as if it is turning into a ‘blow off’ top. That’s not to say it can’t rally further. But silver is no longer cheap. It’s also worth noting that the gold: silver ratio (which measures the relative value of the two precious metals) now stands at 51, down from 90 at the beginning of last year. This means that silver is no longer seriously undervalued compared to gold, suggesting that something may eventually give.
