Gold was on fire this morning, surging over 2% to hit yet another all-time high. It sliced through $3,300 per ounce, going on to hit $3,330 before pulling back.
Gold was another of those assets which slumped in the aftermath of President Trump’s reciprocal tariff announcement, made two weeks ago today. The sell-off was a response to the losses seen across financial markets as leveraged players were forced to sell anything they owned to raise funds to pay hefty margin calls.
But the subsequent dislocation which saw bonds soar, then crash, even as the US dollar sank to three-year lows, meant that US Treasuries were spurned, despite their long history as the prime financial safe-haven. That role now appears to be taken up by gold.
Today's move was driven by a dip in bond yields, further dollar weakness and a rebound in uncertainty over the outlook for global trade. But, although in danger of sounding like a stuck record (remember them?), according to its daily MACD, gold is now as overbought as it was back in August 2011, just two weeks before it peaked after a multi-year bull run.
Source: TN Trader
Silver also spiked higher this morning, pushing above $33 per ounce before pulling back once again. Silver is not overbought, although it has rallied sharply over the past nine days. It is still a long way below its own record high from April 2011, when it came within a few cents of $50 per ounce.
The gold:silver ratio (that is, the price of gold divided by the price of silver) is holding over 100. This is historically high, and is at levels from which it typically drops. Now, the general assumption is that this will correct through higher silver prices. But that’s not necessarily true. It could come down if gold falls and silver does nothing. But it is still worth keeping an eye on.
