Silver Plummets, Gold Holds Steady: What's Next for Precious Metals?

Summary

Precious metals experienced significant volatility, with spot silver crashing double digits into the low $70s before finding support, while gold held the mid-$4800 range. This marks a critical test for the bull trend, with the key question being whether this is a washout bottom or a fundamental shift in the technicals. Expert Gary Wagner believes the sell-off is primarily driven by traders taking profits rather than a change in fundamentals. While inflation remains above the Fed's target and economic weakness is appearing, these factors should theoretically support precious metals. Silver, often considered the higher-beta asset, saw a drastic 26% drop in a single day, falling below its 50-day moving average, a sign of technical damage. Gold, however, has remained above its 20-day moving average, indicating relative strength. Support for gold is eyed around $4600 and potentially $4400, while $70 remains the critical line in the sand for silver. Despite the current correction, Wagner maintains a positive outlook for gold, believing it could reach $5800, possibly even $6000, by the end of the year, suggesting this is a correction, not the end of the bull run. The US dollar has also shown weakness, trading around 95, its lowest point since March 2022. Traders are advised to watch for support levels and recalibrate strategies during these volatile periods.