Gold and - especially - silver soared today, considerably more than they did when we posted our regular Alert, so we think that you’d appreciate a quick update.

In short, precious metals seem to be reacting to yet another twist in the already-twisted Brexit political theater. Here’s what happened (quoting from Bloomberg):

“French President Emmanuel Macron blocked the European Union’s attempt to delay Brexit for three months, raising the prospect the U.K. might not know whether it will get an extension until just hours before it is scheduled to be ejected on Oct. 31, even without a deal.”

It’s not that the no-deal Brexit really became probable - it didn’t. It’s just that Macron wants the delay to be extended to only the end of November. Of course, it’s almost certain that the officials want to and eventually will agree to extend the Brexit deadline and everything that we see and read now is just smoke and mirrors to mobilize the UK to figure out a way to do something. That’s pretty obvious. In my view, it’s likely another small step toward the situation in which the British voters clearly demand another public vote, where the Brexit decision will change into Bremain. Naturally, we could be wrong here, and whether we are or not is one issue, but gold’s and silver’s short-term price path is another issue.

Today’s rally and increased uncertainty-driven demand is likely to keep the prices at temporarily elevated levels for a few days, which means that the scenario that we previously described as just a possibility, became likely. Namely, the precious metals market might stay at these (or even slightly higher) levels until early November when we have the next reversal date. This reversal date is based on all three key parts of the precious metals sector: gold, silver, and mining stocks, which means that it’s particularly likely to work.

Summing up, based on the Brexit-related turmoil, the next week’s outlook is rather unclear with a slightly bullish bias, and it seems that the next big decline in the precious metals sector will start in early November.

As always, we’ll keep you - our subscribers - informed.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager