Silver has lagged gold for months, but this is why we may finally be at the long overdue end to this gut-wrenching bear…

by Clive Maund via Street Wise Reports

On its long-term 10-year chart silver superficially looks like it may still be in a bear market, but on more careful inspection we can see that a large Head-and-Shoulders bottom pattern is completing, which is tilted compared to the similar pattern that is completing in gold, because silver tends to underperform gold at the end of bear markets and the beginning of bull markets. As we can see, unlike gold, it is still some way from breaking out of this base pattern, but should do so not long after the dollar breaks down from its Broadening Top, that we look at in the parallel Gold Market update.

Volume indicators are most auspicious, with the On-balance Volume line in particular looking very bullish indeed, since it is already at new highs, which is remarkable given that the silver price is still a long, long way from its 2011 highs. Since silver is in the late stages of forming the Right Shoulder of its H&S bottom it is at a good point to accumulate, although given that there is considered to be a high chance of a near-term relief rally in the dollar before it finally collapses, we may see an even better price in coming days and weeks, although this is likely to be the last chance to buy silver anywhere near to its bottom for this cycle.

 

 

On silver’s 6-month chart we can see that it is at a good point to react back on a near-term dollar bounce, because it has arrived at the top of the channel shown in an overbought state, and any such reaction will be regarded as throwing up a buying opportunity, especially if it should break down from the channel and drop back towards its July lows, although it is considered unlikely that it will drop back this far.

 

 

Copper reacted sharply on Friday, and as it has been leading the metals in the recent past, this is viewed as an additional sign that a dollar bounce is pending and a near-term reaction in gold and silver. The latest copper chart may be viewed in the new Gold Market update.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

 

  1. The pump and dumpers are at it again. Because it is rarely used in the monetary today except as mints coin collectables, it has moved from a monetary based metal to an industrial based commodity where low prices are needed so products that contain it can be marketed and sold around the planet. 70 to 89% of demand is industrial, manufacturing and retail jewelry. The monetary demand has become too small to effect price and this demand can never offset the drop in demand of the other 3 sectors.

    Another factor is world trade has slowed which also effects demand. Also because of the constant flow of new technology the amount used in products has been going down every year. For solar panels 10 straight years. Still another factor is that people generally in the west have less disposable income which also effects demand. Last June and July when the price was hovering close to $21, July’s retail jewelry sales fell off a cliff and this shows how sensitive demand has become to price.

    All of this is why silver will not rise significantly but only gradually with time with inflation.

    • I agree with everything you say, when the economies of the world are more or less in equilibrium. However should the current paradigm start to collapse ( As many experienced financial analysts are predicting ) , then there will be a large volume of fiat money looking for the safety of solid assets. Silver is a relatively small market, it is not unreasonable to imagine in these circumstances that silver will rise in paper value at a meteoric rate.

      But I guess really under these circumstances would you want to part with your stack ??

    • “The monetary demand has become too small to effect price and this demand can never offset the drop in demand of the other 3 sectors”

      MORON: the verb is AFFECT not EFFECT, it is worrying that Uncle Sack has to resort to Borderline Trolls

    • blahh,blahh blahhh…… I get so tired of mornons like you. Troll to the hilt. Throw in a few good lines to make it look like you have half a brain but have no clue what is even going on in the real world..

    • Hey, I like jj. He has a good understanding of how our present market systems works. And he’ll be correct, right up until the day he is wrong when it all collapses around him like a game of Jenga.

    • @jj

      In the next 10 years, not tomorrow or next week.

      I’m buying, big purchase of Ag at spot, and getting myself one of those fancy kilo coins, so that when I am old, I can remember my days of youthful stacking at these low-low prices.

  2. Silver phyzz is the buy of a lifetime based on the silver to gold ratio of 74 ounces of Silver to 1 ounce of Gold. Due the Math. What is the better buy? You don’t have to have a PhD in Math to figure this out! So I keep on stacking the silver shiny phyzz because of this imbalance of value. What a gift from above. Take advantage of this simple gift of great value. 

    Stacking and packing

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