Contrary to what most people may have expected, the current gold price is not trending higher right away. In fact, it seems the world’s leading precious metal is slipping further, whereas silver is gaining. The somewhat odd correlation between both metals continues unabated.
Gold Continues its Struggle
Even though the global economic outlook is anything but promising at this point, there are still interesting trends. Precious metals should, under normal circumstances, soar during these uncertain times. In reality, it all comes down to which precious metal one is showing an interest in. As of right now, gold is not heading in the expected direction whatsoever.
In fact, gold is still in a position where its entire run could reverse. No major downtrend is to be expected, according to several analysts, but the precious metal will continue to face a fair bit of market pressure. Looking at the current December 2020 futures, a drop to the low $1,900 range remains within the realm of possibilities. It remains to be seen if the market will eventually go this low, however.
In the long run, no one can accurately predict what will happen to any of the markets. After all, there is still a lot of uncertainty regarding the global economy. Stimulus packages have yet to make their full impact. While schools will attempt to resume normal operations, a lot may hinge on what happens in this regard. If more COVID-19 cases pop up, the entire world may face a steep setback once again.
Silver is Moving up Again
One could also argue that the year 2020 has proven very beneficial to the silver price. This often underappreciated metal has noted a very solid uptrend throughout 2020. It now appears this momentum is resuming, even though no one really knows why that is the case. With its overall lower price point, silver is often more appealing to new investors, or those looking to make minor diversification adjustments.
Judging by the current uptrend, silver could very well set a new 220 high in the coming weeks. It has found key support between $26 and $27 in recent weeks. Launching the price to above $29.25 is not unlikely, although it remains to be seen what happens exactly. The precious metals markets are all in a bit of an unusual state right now, Overall, the momentum appears bullish, but that can change at any given moment.
Looking at the silver futures for December, a continuation of the uptrend is likely. Current prices hover between $28 and $29, with key support remaining near $26. The end of the year may prove interesting for all precious metals. How high the markets will go, is difficult to determine. Looking at the futures is merely a speculative effort, and not an official market indicator.