Gold Breakout Confirmed... Almost / Commodities / Gold and Silver 2021

Gold finished solidly above the$1,800/oz level on Friday, marking the yellow metal’s best weekly close sincelate August. More importantly, gold may be breaking out of a largerconsolidation pattern that has been in force since prices peaked in August oflast year.

Prices edged above thedescending triangle line – although perhaps not convincingly so.

Ifthe breakout is real, then we should see a follow-through advance this week toconfirm it.

Interpreting chart patternsis more of an art than a science. Any given technical setup, whether bullish orbearish in appearance, can fail.

Traders who lack convictionin the underlying fundamental case for gold will bail out of their positionsthe moment they read something bearish into the price action. They may getlucky with some trades, but they likely will never realize the massive gainsthat come from holding through the duration of a major bull market.

That requires conviction.

Fortunately, thefundamental reasons to invest in precious metals at this time – withstagflation likely looming in 2022 and beyond – are compelling.

Loose monetary policy andrising inflation bode well for hard assets in general.

Gold and silver inparticular are uniquely well-situated to benefit from a potential currency crisis.

Gold and silver are formsof hard money. No other commodity or collectible serves that unique function.

That’s important to keep inmind when investing not just for inflation, but also for the potential of a severedownturn in the economy or loss of confidence in the U.S. dollar.

Most investments related to hard assets, including base metals, energy, and real estate, areeconomically sensitive – meaning they tend to get pulled down when the economyand stock market head south.

Gold shows virtually nocorrelation with the business cycle and can sometimes move in the oppositedirection of conventional asset markets.

It has underperformedstocks as well as many other types of hard assets year to date. Frustratingthough that may be for gold bulls, the divergence isn’t anything for long-termholders to worry about.

It represents anopportunity to switch out of assets that have appreciated substantially andinto precious metals which are relatively undervalued.

The pendulum of investorsentiment will inevitably, eventually, swing away from the stock market and itssky-high valuations. It will in time swing toward safe havens, toward hardassets, and ultimately toward hard money.

Stefan Gleason isPresident of Money Metals Exchange, the national precious metals company named 2015"Dealer of the Year" in the United States by an independent globalratings group. A graduate of the University of Florida, Gleason is a seasonedbusiness leader, investor, political strategist, and grassroots activist.Gleason has frequently appeared on national television networks such as CNN, FoxNews,and CNBC, and his writings have appeared in hundreds of publications such asthe Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2021 Stefan Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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