Gold, Silver Very Overbought

Both gold and silver surged dramatically higher this past week, propelled by torrents of investment capital deluging in. The resulting major new highs are really exciting, unleashing widespread fear-of-missing-out buying. But the precious metals’ blistering jumps have left them very overbought. They have come so far so fast they are at and above technical extremes that have proven unsustainable. So caution is in order here.

Gold and silver are powering higher on balance in secular bull markets that have been running for years. And their fundamental underpinnings are stronger than ever. The Fed’s astoundingly-epic money printing since mid-March’s stock panic has catapulted stock markets to dangerous bubble valuations. And the vast majority of investors have yet to diversify their stock-heavy portfolios with counter-moving precious metals.