… I have seen since some of the historical pictures of Russian leaders from the 70’s, but he usually is the guy to scream fire in the silver theatre before the end of the movie. Interesting that he is saying that we aren’t there yet in silver according to his favorite DSI indicator, highlights of one of his recent articles below:
Tens of thousands of my regular readers know full well that I am the biggest contrarian in the resource space. While gold, silver, platinum and copper have been hitting new all-time highs again and again lately rational investors are looking for a pullback. Perhaps even a 50% pull back as gold did from 1974 into 1976 right in the midst of one of the greatest gold bull markets ever. But sometimes rational doesn’t necessarily mean right.
I track the Daily Sentiment Indicator every day, the DSI. Last Friday, January 16th the DSI for gold was 64 and 62 for silver. The highest for gold was 85 almost a month ago. That is not a top and much to my consternation even with new all-time high prices, the DSI has gone down for all the metals.
In my view the DSI is easily the single most valuable sentiment indicator I am aware of. I used it to great effect in late April of 2011 when I called the top in silver to the day. I can assure you that I pissed off a lot of the forever silver freaks that day. But the DSI for silver was 96% and it only hit 94% on January 21st of 1980 at the very top.
But there are other great sentiment indicators for the metals. I happen to like silver a lot so I also track the premium/discount number for the PSLV, the Sprott Silver ETF. Last Friday much to my surprise, PSLV was selling at a 4.7% discount, not a premium that you would expect at a top. In fact, the discount has only been higher three times between now and March of 2020 when it hit a discount of 10% right at the very bottom in the price of silver. In April of 2011 the premium at the top in silver was an incredible 26%.
In short, we are in an interesting era. The parabolic rise in the price of the metals has always marked major tops in the past. But this time does seem to be different. All the sentiment indicators that should be screaming, “TOP” are saying we are a long way from a major top or perhaps much of a correction.
I believe it is because of who controls the price of the metals. The attack on Venezuela and the upcoming massive bombing of Iran scheduled in the next month or so is not an attack on Venezuela or Iran. It’s an attack on China. One way for them to defend themselves is to attack the financial system of the US by dumping treasuries and buying metals.
I am a giant fan of buying things cheap and selling things deer. Silver, gold, platinum and copper are no longer cheap. They may well be cheap relative to where they plan on going in the future. I told people for years to buy them when they were cheap so if you are like me and owned silver under $5 and gold under $300 you are in the cat bird’s seat. But there is something absurdly cheap given $90 silver and $4600 gold. Something that doesn’t reflect the rocket ship ride higher in the metals.
Loading ...
