Precious metals faced a challenging day following Donald Trump’s U.S. presidential election victory. Despite that, gold and silver’s bull market is still very much alive.
U.S. presidential elections are always high-stakes events, filled with tremendous uncertainty, and this trend has only intensified over time. Significant volatility and market turbulence are common, especially when results are announced. This recent election was no exception, with winners emerging in the U.S. stock market, dollar, and Bitcoin, while commodities including gold and silver faced setbacks. Nonetheless, gold and silver’s bull market and future prospects remains strong. Let’s examine their current position and likely path forward.
Rising over 50%, gold has been a stellar performer over the past year. But, as you probably know, no bull market in history has ever gone straight up — there will always be pullbacks along the way. And today was one of those days for gold, which dropped $84.73 an ounce or 3.09%. Gold closed below the $2,700 support level in COMEX futures, causing me to shift to a defensive stance in the short-term (this only applies to futures trading and mining shares, not the long-term holding of bullion). I closely watch $100 increments in gold futures because they often form key support and resistance levels. Though gold is experiencing a shorter-term pullback, its uptrend of the past year is still intact as you can see from the uptrend line. Absolutely nothing has changed about gold’s bull market and long-term prospects, as I will explain shortly.
Similar to gold, silver also saw a sharp pullback as election results became clear, falling back below the critical $32-$33 zone—a key level I’ve closely monitored since silver’s breakout on October 18th. As I mentioned in all of my reports, a decline below this zone would invalidate that breakout. While I remain confident in the long-term bullish outlook for silver, some more time may need to elapse before silver attempts another breakout. I’m watching to see if silver can reclaim this level, with several potential catalysts on the horizon that might drive a renewed push, as I’ll outline shortly.
I closely monitor silver priced in euros, as it strips away the effects of U.S. dollar fluctuations, highlighting silver’s intrinsic strength—especially on days like today, when the dollar experiences significant fluctuations. Silver priced in euros recently closed below the €30 support level I’ve been tracking. However, this support is more accurately viewed as a zone between €29 and €30, rather than a strict horizontal line. I’m now watching to see if silver can hold within this zone and potentially bounce back from here—and this zone may be even more important than the $32-$33 zone discussed earlier.
I also want to point out a concerning phenomenon that I’ve been noticing occurring in the trading of silver, especially since its breakout on October 18th. Nearly every morning between 8:30 am and 11 am EST, silver has been violently slammed—a pattern that has repeated in 10 of the last 13 trading sessions. This behavior is highly unusual and has been statistically proven, confirming that it is not a natural market occurrence. I strongly believe this is an attempt to suppress silver prices and prevent a substantial rise.
A prevailing theory in the precious metals community suggests that silver’s price suppression stems from large futures market short positions held by bullion bank trading desks—positions that are equivalent to nearly 200 million ounces. This means these banks face close to $200 million in losses for each dollar increase in silver’s price. There is good reason to believe these short positions are intentionally used to keep silver (and similarly gold) prices down, aiming to make the U.S. dollar and other fiat currencies appear stronger by comparison. I believe that silver and its proponents will eventually prevail, but not without a fight, as you can see.
I’ve developed an indicator to help confirm price movements in silver, called the Synthetic Silver Price Index (SSPI). This index combines the average prices of copper and gold, with copper adjusted by a factor of 540 to prevent gold from disproportionately influencing the index. The SSPI closely mirrors silver’s price movement, even though silver itself is not an input. Currently, a major resistance zone lies overhead in the SSPI, and a breakout there would give a bullish confirmation signal for silver. However, today’s declines in copper and gold caused a sharp drop in the SSPI.
I monitor silver mining stock ETFs, particularly the popular Global X Silver Miners ETF (symbol “SIL”), for additional insights into silver’s price trends. Today, like silver itself, SIL declined, returning to its $36-$38 support zone, prompting me to adopt a more defensive stance. Notably, SIL and other silver stocks fell less than silver did, which could signal underlying strength. A rebound in SIL above the $36-$38 range would provide a bullish confirmation I’m watching for.
The Amplify Junior Silver Miners ETF (symbol “SILJ”) also fell below its support zone, causing me to take a defensive stance for the time being. A close back above the $13-$14 zone would generate a bullish signal.
Today was a particularly volatile and unusual trading day, driven by the highly anticipated election and its wide-reaching implications, which investors are only beginning to digest. I’d advise against overanalyzing a single day’s trading action. Adding to this week’s turbulence, there’s also a Fed meeting on Thursday where a rate cut is expected, and China is likely to announce another stimulus program—both of which could be bullish for commodities, including precious metals.
The precious metals bull market remains firmly intact, supported by numerous bullish factors that continue to drive it forward. As I discussed recently, the U.S. faces a massive debt burden that no single president can undo, given decades of accumulation. And it’s not just the U.S.—nearly every major economy is similarly indebted, a situation beyond President-elect Donald Trump’s influence. The fiscal and monetary challenges in these countries further strengthen the long-term case for precious metals.
Also, I’d like to clarify my approach to investing in precious metals. I hold a core, long-term position in physical gold and silver bullion, which I accumulated at much lower prices, and I plan to keep it through the global financial reset I anticipate. I expect gold to rise beyond $15,000 per ounce and silver to reach several hundred dollars per ounce. Despite fluctuations that may occur in the precious metals market, I have no intention of selling this core bullion position anytime soon.
Additionally, I engage in shorter-term trades in precious metals futures and mining shares, which are far more volatile and risky, suitable only for experienced investors. So, when I mention taking a defensive stance, I’m referring to reducing my exposure in these high-risk, shorter-term trades—not in my core bullion holdings. While I analyze and share price charts, this shouldn’t be seen as an endorsement or encouragement of short-term trading in precious metals.
I use a trend-following approach to markets and trading, a strategy that has proven successful for numerous market legends. I don’t aim to predict tops or bottoms; instead, I focus on capturing the middle—the “meat”—of the movement. This is why I turn bullish on breakouts and shift to a defensive stance when key supports are broken. I’ve found that many misunderstand this trend-following method, assuming it requires predicting every high, low, zig, and zag. I’m not clairvoyant, nor do I have a crystal ball—I simply respond to what the market is telling me in real time.
