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What Do Gold and Silver’s Trading Ranges Signal to You?

Jeff Clark, Senior Analyst, 
FEB 23, 2022

There’s been a lot of “noise” in the financial markets for a while now. From geopolitical conflicts and currency censorship, to unrelenting inflation and slumping stock markets, our psyche’s have been bombarded.

There’s been lots of noise in the gold and silver markets, too. Plenty of bull and bear proclamations, and more recently some misunderstandings about what gold does during periods of rising interest rates (it tends to rise).

How does one navigate through all this noise to come to any sensible conclusion about the state of gold and silver and where they might be headed?

We know the fundamental case from Mike Maloney, but when it comes specifically to prices, one way to do that is to focus on the trend.

Here’s a perspective on their trends you may not have seen elsewhere…

Gold and Silver Trading Ranges

The following charts show gold and silver’s annual trading range since 2014, including 2022 to date (through Friday February 18). It also lists the dollar amount between the high and low, so you can see how much they’ve fluctuated throughout the year.

Something stuck out to me right away when I saw this. See what you think…

The thing I spotted right away was that including 2022 year-to-date, the gold price has made higher lows for seven consecutive years.

Even during the crash of March 2020 it stayed above the prior year low.

This is one of the hallmarks of a bull market. Despite falling 3.8% last year, gold’s low was higher.

Its volatility is useful information, too. On average, since 2014, the gold price has fluctuated $285 during the year (including 2020, excluding 2021). In other words, seeing gold fluctuate by triple digits during the year shouldn’t scare us—the trend is clearly up.

Here’s the trading ranges for silver since 2014.

There are several things we can observe about the silver price.

  1. Silver’s greater volatility is readily apparent. In 2020 it fluctuated over half of its entire price. This has happened before, too.
  1. The price went sideways for years. But silver has a history of doing this between giant spikes. It’s also worth pointing out that it’s trading higher now than it did eight years ago.
  1. Other than the Covid selloff (March 2020) silver has made higher lows since 2018. And higher highs every year since 2018. A continuation of this trend would mean silver trades above $30 this year (which is what many analysts predict, including me).

This big picture view of gold and silver helps keep things in perspective. If you’re someone who gets frustrated if they don’t respond the way you think they should on certain days, focus on the overall trend and that frustration may ease.

And of course don’t forget that gold and silver have periods where they soar. Mike Maloney is convinced another one is inevitable.

About Jeff Clark

An active investor with a love of writing, Jeff Clark is a globally recognized authority on precious metals. As the son of an award-winning gold panner, with family-owned mining claims in California, Arizona, and Nevada, Jeff has deep roots in the industry. Jeff regularly speaks at precious metals conferences, serves on the board at Strategic Wealth Preservation in Grand Cayman, and provides exclusive analysis and market commentary to GoldSilver customers. Follow Jeff on Twitter @TheGoldAdvisor