Silver Ready To Shine – Commodity Piece
Precious Metals Starting To Run
It’s finally nearing time for Silver to start it’s run. This typically happens near a Commodities bull run, and with Gold breaking and confirming new highs, we believe that time isn’t too far off.
We’d like to start this article, however, by first showing a chart to address an interesting question by one of our members. The question was in response to our last article on Gold that can be found here, and was along the lines of:
Gold stocks are still technically stocks and should experience a drawdown (maybe relatively less) in an equity downturn
This is a fantastic question and is often what is witnessed as an outcome. However, it does depend on the degree of the fall in S&P 500 (equity component) versus the rise in Gold spot price (precious metal component). Highlighted in green (in the chart below) are a couple of times when the S&P 500 was falling, but Gold spot price was rising more aggressively, leading to a period of upside for Gold Miners ($GDX). Remember, this has often shown to be a short-lived event, and profit taking + strong risk management is extremely necessary during such situations.
Gold Versus Silver
Now, with Gold showing a lot of strength, is that the best precious metal bet on the table? Not according to the Silver to Gold ratio. This ratio is around the value zone (green rectangle) and is primed to breakout. Even if there are short-term drawdowns below the value zone, this is the time to load up on Silver! It’s a big bet we’re willing to make based on our conviction level in an often-overlooked market.
Intermarket Analysis
Silver has typically had a negative correlation with USD ($DXY) as shown in the chart below.
With USD ($DXY) showing weakness by falling bellowing its mid-range and coming back to confirm the breakdown, the odds are in favor of Silver. But a recapture of the mid-range + confirmation might indicate more sideways/pullback for Silver before the next leg up. So which one will it be?
To answer that, we have to look at Silver’s short-term technicals, long-term technicals, and Cycles Forecast. That’s exactly what we have in the next section for our paid members. We’re also going to look at Silver Miners and Silver Junior Miners because they have just setup for BIG money-making opportunities. That’s our one and only goal for our members.
This is also why we’re about to release our Q2 2024 Cycles Forecast for multiple different asset classes and equity names. The introductory article for the quarterly Cycles Forecast can be found here, and we’ll have another detailed article for the release coming out soon. Please note that our Founding Members will be the first to get these Cycles Forecasts (the full deck covering every name!) emailed to them well ahead of the actual release!