Gold & Silver Are Staging an Impressive Rebound
After the sharp post-election pullback, gold has regained a significant portion of its losses and even hit an all-time high when priced in euros.
After the U.S. presidential election, gold and silver experienced a sharp price decline that was irrational in my view. Interestingly, a similar sell-off occurred in 2016 when Trump was first elected, only for gold to surge to record highs shortly afterward. I've been emphasizing to everyone that this is merely a routine pullback within a longer-term secular bull market—nothing to be alarmed about. Sure enough, this past week saw a significant rebound in both metals, with gold recovering a substantial portion of its losses and silver poised for another breakout attempt.
On Friday, the spot price of gold rose 1.75% to close at $2,716.34, leaving it just 2.64% below its all-time high reached on October 30th. This remarkable rebound allowed gold to recover nearly three-quarters of its recent losses in just one week. The recovery was driven by investors reassessing the sell-off as overdone, Goldman Sachs reiterating their call for $3,000 gold in 2025, and by mounting geopolitical tensions. Notably, President Joe Biden authorized Ukraine to use U.S.-supplied long-range missiles to strike deep into Russian territory for the first time. In response, Russia retaliated with hypersonic missile strikes and formally lowered the threshold for considering the use of nuclear weapons, escalating the risk of nuclear conflict.
COMEX gold futures closed above the critical $2,700 resistance level on Friday, giving another bullish confirmation signal. I closely watch $100 intervals in COMEX gold futures as they often act as important support and resistance levels. Assuming the $2,700 level holds, the next major milestone to keep an eye on is the all-time high of $2,800. Breaking through $2,800 would set the stage for gold to surge toward $3,000 in short order, further solidifying its upward trajectory.