Critical Point for Precious Metals

With Gold and silver having being corrected close to 20% and 15% from their last year highs, they are poised at an interesting level. This is a critical point for precious metals.

The decline happened as investors feared the dollar index has made a bottom around 89 and risk on trade with vaccination in the world is on. Many think that economic growth and inflation will be higher than anticipated and this will lead to tightening and harder stance by Fed much before than they anticipated.

However, after the FOMC meet on 17 March’21, it is quite ocular that interest rate will not be hiked by Fed before 2024. This coupled with high inflation is a classic bull case for gold.

Hence, calculated positions can be taken in both silver and gold at current levels.