Silver Still Undervalued, Gold Trading Above Fair Value
Gold prices are trading above their fundamental value, while silver is undervalued, according to Monarch PMS analysis.
The modelled range for gold is between $3,248 and $4,595, averaging at $3,922. At its current price of around $4,242, gold trades 8% above the midpoint and 8% below the upper band. However, considering the January peak of $5,589, gold's price was 22% above the ceiling of the entire range, which is seen as evidence that the January top was speculative rather than fundamental.
Silver, on the other hand, has given back its relative overshoot and now trades at a discount. Its modelled range is between $54 to $77, averaging at $65, with silver currently priced at $61.7, which is 6% below its expected midpoint. This makes silver the cheaper of the two precious metals.