Loading ...Silver Expectations
We know that in most cycles, gold moves first, silver also goes higher but at a slower pace initially. After a while (depends on various circumstances) gold will continue to rise but it’s rate of ascent slows down from it’s initial rate and silver begins to accelerate it’s rate, to reach higher percentages of increase to what gold is doing in this intermediate phase.
That changeover is a process and it began recently. It is now about to increase, where silver’s gains will be more noticeable and significantly larger percentage wise, than gold’s gains going forward.
I expect silver to at least reach the $35+ highs from last October by the end of next week. That would make for a Happy St. Valentine’s Day!
“That changeover is a process and it began recently. It is now about to increase, where silver’s gains will be more noticeable and significantly larger percentage wise, than gold’s gains going forward.” Naturally, that will result in a decreasing GSR.
PS: With the usual disclaimer that this isn’t investment advice, just my opinion, I like Hecla(HL) here for both a trade and longer term.
HL is one of my two largest positions. The other being EXK, which has been very good to me in the past.
AG is another one I have owned in the past, but it is just too wild and it seems to have a mind of its own. It’s too hard to track. It is one of the purest plays on silver itself though if you have the stomach. It has a lot of catching up to do. I reckon because of all of the chart damage it has suffered, it will be just too wild to invest in. The ups and the downs will be massive.
I too was expecting the $35 prior peak to be reached explosively once a low was found. In fact I believe the prior peak will be exceeding by a decent margin (by several dollars at least) very shortly, before silver rests. Not sure about next week for $38 or $40, but $35 is extremely doable.
I am more confident about the general trend over the next 4-6 months (explosively higher) than I am about day to day or even week to week predictions. That being said, I think this initial thrust will be very quick.
Agree that $38-$40 is likely after $35 high gets taken out and that it probably won’t be immediate. Will assess next week, especially if $35 reached by the 14th.
Thanks CM. Based on the 12 month rise in gold with momentum to hit $3k I’m observing that gold’s risen (nearly) 50% in a 12 month period. In terms of time and price, I believe gold is over stretched and due for a consolidation period (recent 2018 run was around 30% and 2020 around 35%). The only times since the bull run started around Y2K where gold rose 50% in a year was in 2007 (GSR relatively flat in 46-55 range) and in the 2011 blow off top (GSR plummeted to 31). FWIW, I think we’re in a 2007 scenario and the next 6-9 months gold could consolidate in the $2,550-$2,800 range before solidly breaching 3K (possibly in a ’08-’09 recovery spike if we get an extreme stock mkt event). GSR will hold steady in the 80-95 range. For now I’m pulling most PM equitys until I see gold get a 10% retrace (equities only seem to respond to PM momentum but quickly peter out when PM’s go flat). NOT expecting huge declines but worth avoiding. Gold 2k took a long time to breach and here we are only a year later knocking on the next milestone. Also, for now the US Stock market plates are still spinning but that could change quickly. I do credit this view in part based on similar observations by Francis Hunt (Mkt Sniper). I know, not much TA in here but that’s my take.
Your analysis regarding gold fits in with my belief it will slow down from here and future gains in this leg are likely to be more muted, so your analysis is quite possible. Where I might caution you is that the miners are just starting to break out and just as they disappointed as gold was surging, they might surprise to the upside while gold goes sideways or corrects modestly. Maybe take some off the table(the ones where you might have the largest gains) and let the laggards run as they probably won’t have much downside, unless bad fundamentals and or jurisdictions.
IMO – miners aren’t going to get their just due without a substantial crash in competing equities after which a sudden and insane value will be realized (probably even before silver recovers). Until that happens I’m sticking to the PM-equities-primarily-respond-to-momentum thesis. Wouldn’t it be sweet if/when DJT removes the special section 230 exemptions given to big tech media platforms.