Contrary to popular belief, I do not know exactly what the future price action in gold and silver will be. On the other hand, I’m not just going to be making blind guesses here. I do have logical reasons for picking the price levels that I’m selecting as potentially advantageous prices at which to buy – or buy more – gold and/or silver.

Stay tuned to the end, where I’ll reveal what I believe is the absolute best gold price to buy at.

Gold’s Recent Price Action – Higher and Higher

It’s obvious that gold has been on a tear over the past two months. “Gold hits new record high” has become almost an everyday headline in the financial market news.

Let’s first look at a current (as of April 10^th) daily gold futures chart. Shown below, the chart has two technical indicators plotted on it -

1. A 10-day moving average (MA), represented by a medium-blue line (there are also two medium-blue long-term trend lines drawn on the chart, but you can pretty much ignore those – they’re based on previous price action that occurred before the recent major bull move to the upside – price has since moved so far above them, I don’t consider them to be relevant at the moment)
2. A Fibonacci retracement calculation, covering the sharp move up in price that’s occurred over roughly the past two months (end of February till now)

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You can see that when several consecutive strong up days in gold moved the price noticeably above the 10-day moving average, that when a slight downside retracement occurred, gold prices found support right around that 10-day MA. From there, gold resumed its strong uptrend.

What I would take away from that, for investors wanting to buy in on a pullback, is to watch for similar price action in the future. That is, when gold’s price action has jumped it significantly above its 10-day moving average, if a pullback occurs then, look for signs of the market finding support around the 10-day MA – and, thus, presenting a potentially favorable buying opportunity at whatever that price level is.

Below is the same daily chart, this time with the 50-day moving average plotted on it. What might first jump out at you from this view is the fact that, since gold began its major bull run of the past two months, price action hasn’t taken the price of gold anywhere near the 50-day moving average. Any investor who was waiting for a retracement to the 50 MA before buying…well, they’re still waiting, while investors who didn’t wait for such a pullback are enjoying very nice profits on their investments in gold.

However, I do think that it’s worth noting that the current price level of the 50-day moving average shows a close correlation with the price that would represent a 61.8% Fibonacci retracement. My takeaway from that observation is that in the event of a major corrective downside retracement some time in the future, I would be watching again to see if there’s a convergence of potential support at a price level that matches both the 50-day moving average and a 61.8% Fib retracement. (Right now, that’s around the $2,160-$2,170 price range.)

Currently, I think it might be more probable that a downside retracement might find support and be halted around the price level that represents a 38.2% Fibonacci retracement, rather than a 61.8% retrace. Looking at the chart again, you can see that the 38.2 Fib level is, at the moment, about halfway between the current gold price and the 50-day moving average line.

The Long-Term Price Trend in Gold

Below are shown both the weekly and monthly gold charts. The main thing to note from these longer-term views of the gold market is that both of them give a solid indication of a fresh bull market in gold.

Weekly Gold Chart

Monthly Gold Chart

Both the weekly and monthly charts reveal gold prices having broken definitively above the high set back in August of 2020. That previous long-term high, around $2,080, was matched in March of 2022, and again in May of 2023. It was initially taken out in early December of 2023, when gold briefly surged to $2,150.

The Price Trend in Gold – Momentum Analysis

The charts presented above also include the Moving Average Convergence Divergence – MACD – indicator, shown at the bottom of the chart. The MACD reflects the obvious strong momentum of the current uptrend in gold.

Looking back at the daily charts, the MACD histogram is well above the zero line, and the MACD signal line is, like gold itself, through the roof. However, one cautionary note might be found in the fact that, just in the past couple of days, we’ve seen some slight MACD divergence, as the MACD histogram did not make a fresh high corresponding to gold’s most recent new high. If that does turn out to be the first indication of a possible upcoming correction to the downside, then I’d look back at the previous MACD histogram high formation that peaked around March 8^th. Although the MACD subsequently rolled over sharply to the downside there, even moving below the zero line, gold only backed up in price about $30 (from around $2,195 to $2,165) before again turning sharply higher.

In short, we perhaps shouldn’t look for massive downside retracements to occur in this extremely strong bull market in gold - at least not in the very near-term future. Again, the previous pullback only briefly drew the gold price back down to its 10-day moving average.

One final thing that I hope you notice from looking at these charts is that gold has shown that it has no problem at all with stringing together several big up days in row, without feeling the need to include a single down day.

Silver Prices – Poised for a Strong Breakout

As noted, gold is hitting record new highs seemingly every other day. Meanwhile, silver hasn’t yet scored a new all-time high above $50 an ounce, nor even topped its 2011 close-by high around $45 an ounce.

Silver is, however, rocketing higher, and has recently begun to slightly outperform gold. The gold/silver ratio is falling. A continued decline in the ratio should attract more and more investment dollars to silver.

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As I type this on April 9th, spot silver is trading at $28.22 per ounce. It started off the month of April – just a week ago – at $24.50. That translates to approximately a 20% gain in just one week.

Here’s the thing…I don’t think that the following is a logical scenario:

• Gold just continues to score new all-time highs…
• While silver languishes around $20 below its all-time high

I think a much more logical progression of price action would be to see silver continuing its current breakout move to get above its 2020-2021 highs, and going on to eventually take out its all-time record high of $50. Above the $30 an ounce price level, $35, $40, $45, and then, yes, $50, an ounce beckon.

A five-year weekly silver chart shows the shiny precious metal in a clear, long-term uptrend since August of 2022, when it was trading just above $18 an ounce. Drawing a trendline across the lows, starting from that 2022 point, shows likely long-term trend line support at around $24…and moving higher. The 10-period moving average on the weekly chart is higher than that, around $25.35 - and on the daily chart, higher still, at $26.90.

Unlike gold, whose long-term charts show it already clearly having broken above previous highs, silver is poised right on the edge of breaking through highs just below $30 an ounce, made back in 2020 and 2021. A daily close above $30 should signal the start of the next leg up in silver prices and attract fresh buyers. It’s reasonable to expect silver to quickly surge higher from there – toward the next resistance level around $35 – once it breaks out of the top end of the range that it’s been trapped in for the last four years.

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Also note that the MACD indicator, while definitely bullish, is not giving noticeable signals of overbought conditions in the market.

Now, I could be wrong (believe it or not, that has actually happened on a couple of occasions), but I expect silver to take out its all-time high of $50 an ounce sometime this year. I further believe that it’s likely that, once it does that, the price of silver will rise at an even faster rate as it aims toward the $100 an ounce level. Let’s not forget that gold is already more than twice its 1980 high near $1,000 an ounce – while silver hasn’t yet even matched its 1980 high. In other words, silver still has a lot of room to run just to “catch up” with gold’s price rise over the past couple of decades.

Market analyst projections for silver hitting new highs somewhere between $100 and $300 an ounce – looked at in relation to current gold prices (which I also expect to continue higher) – are not as unrealistic as they might appear at first glance. In fact, they’re actually quite reasonable.

What’s the Best Price to Buy Gold At?

Certainly, at some point there will be a corrective retracement to the downside in gold prices. The price of any traded financial asset never just goes straight up forever. Rather, market prices, even in strongly trending markets, tend to move in more of a zig-zag pattern. The price drives higher for a while (in an uptrend), and then it backs off a bit as investors take profits or as traders try the short side of the market.

But it’s usually folly to try to guess when, and at what price level, such downside corrections will occur, or exactly how they will unfold. I’m sure that many traders made the mistake of thinking that gold, after moving very quickly up to around $2,200 from around the $2,000 level, thought that it might retrace about half that distance and give them a chance to buy in at $2,100 or so. But they were wrong.

After clearing $2,200, gold only experienced a quick, two-day dip that went no lower than $2,165 before it resumed its sharp uptrend. Just a few days later, it was knocking on the door at the $2,300 level. Anyone who was waiting to buy gold for around $2,100 got left behind – and they’re still getting left behind as gold nears $2,400 an ounce.

Yes, at some point we’ll see some kind of downside retracement. But that downside correction might not materialize, for example, until gold hits $3,000, and might only involve a quick dip down to around $2,750-$2,800.

What I’m getting at is this: Don’t try to outguess the price action of an asset that’s zooming higher. What’s the best price to buy gold at? – Any price below what you expect the price of gold to be a year or so from now. In other words, if you believe that gold may reasonably be headed for, say, $5,000 an ounce, don’t wait around, quibbling over whether you ought to buy more gold at $2,300 or try to get it at $2,250. If you’re right in your market analysis and forecast, and gold goes to $5,000 an ounce – or considerably higher – then you’ll be doing fine with your gold investments, regardless of whether you bought in at $2,250, $2,300, $2,350…or $2,750.

So, if someone asks me if gold is a good buy at $2,350 – or $2,250 – or $2,450 – my answer in any instance is going to be a resounding, “Yes”. Just look at the price action in gold over the past couple of months. Wherever and whenever in there you bought gold, well, it’s worth more today. Gold is in a solid, strong bull market. And that means that on any given day, the odds of gold going higher are better than the odds of it going lower.

I will be buying, buying, buying gold and silver as long as whatever price I can buy them at is lower than what I think their prices will probably be a year from now. In my opinion, the very best price to buy gold at is “whatever the best price I can get it for right now is”.

The Best Price to Buy Gold - Summary

Although I’ve presented a purely technical analysis of gold and silver prices here, I think the main case for investing in precious metals is fundamental one, driven by factors such as inflation, economic and political uncertainty, and central bank gold buying (topics that I’ve covered in other articles). Nonetheless, careful technical analysis of gold and silver can be an essential guide to help you identify potentially advantageous market entry price levels.

But I’d like to reiterate that the current bottom line on “the best price to buy gold” is “whatever the best price is that you can get right now”, as I remain confident that the price of gold will continue driving higher in the future.

Before we part company for the day, I’d like to extend special thanks to TradingView.com for their excellent charting and in-depth research tools. Their website can be of valuable assistance to traders of any financial market – commodities, stocks, futures, forex, bonds, or cryptocurrencies.

• J.B. Maverick

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Sources:

https://www.cmegroup.com/articles/2024/through-the-lens-of-gold.html

https://www.linkedin.com/pulse/curious-case-languishing-silver-prices-money-metals-yxale

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