The run in commodities has been stunning. It’s not just silver and gold feeling the love, but oil, wheat, aluminum, nickel, soybeans, corn and others.
We’ve been in a supply-shocked super-cycle for this space and the bulls have reaped the rewards. Deere (DE) – Get Deere & Company Report has rallied with agriculture. Energy stocks via the Energy Select Sector SPDR ETF (XLE) – Get Energy Select Sector SPDR Fund Report have boomed higher with oil.
But the one that suffers from all of it? The consumer.
Rising oil prices impact gas prices. Rising food costs raise the grocery bill. Rising energy prices raise heating costs. It all circles back to the economy as the burden to bear inflation, which is not good for the global economy.
This morning, silver and gold prices were ripping higher, along with many other commodities. However, we’ve seen some disjointed action after such a powerful run as many seem to be wavering.
Let’s take a look at the charts now.
Gold prices have been enjoying a steady rise, but really began to roar late last week. Investors can also look at the SPDR Gold Trust ETF (GLD) – Get SPDR Gold Shares Report.
After gold tested up into the $1,962 area and was rejected, gold found support near the fourth-quarter high and from the 10-day moving average.
Once it steadied, the commodity found the strength to burst through last month’s high and the $1,972 level, then through $2,000.
At today’s high, gold was up more than $80 an ounce and topped out at $2,078.80. That’s just shy of the 2020 high and all-time high up at $2,089.20.
If gold can maintain momentum, this is obviously the next upside level.
On a dip, bulls want to see $2,000 act as support, followed by the $1,962 to $1,976 area. Should these levels fail and gold loses the 10-day moving average, $1,895 and the 21-day moving average will be in play next.
Silver hasn’t performed quite as well as gold, but nonetheless has moved quite nicely lately for the bulls. Investors can also look at the iShares Silver Trust ETF (SLV) – Get iShares Silver Trust Report.
The move sent silver to the 61.8% retracement of the recent range, but now it’s struggling.
A move and close above today’s high could open the door to $28.50, then eventually the recent high up at $30.35.
If silver can’t push through the 61.8%, then bulls want to see $25.50 hold as support, along with the 10-day moving average. Below these measures could put the 21-day and 200-day moving averages on the table.