Silver Bull Market Is Almost Here
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Silver is running out of time and space (on the chart) to decide where it will go over the next months and years. The similarity of conditions to the early 80s suggests that silver could go into a multi-year bear market or continue its bull market:
On the chart, I have marked two patterns 1 to 5, to show how the current period is similar to the period circa 1983.
If the comparison to the 1980s pattern is justified, and the current pattern continues in a similar fashion, then silver will go into a long bear market. If the current fractals diverge from the 1983 fractals by going higher than the point 5 price-level, then the bull market will resume with vigour.
In the short-term for a bull market scenario, the price needs to clear the top line of the flag or pennant-type pattern that has formed since point 5, and avoid dropping below the bottom red line.
There is a big chance that when price go higher than the level at point 5, we will get a rally similar to that of 2010.
As I have pointed out before, there are just too many fundamental obstacles to a bear market scenario. One of the major obstacles is the vastly different economic conditions in terms of interest rates, or appetite (or capacity) for debt and debt-based assets, when comparing today with the early 80s.
Point 5 in the 80s pattern came after a major interest rate peak, whereas point 5 of the current pattern came after a major interest rate bottom. If you understand the relationship between interest rates and silver prices, then you will know that silver will soar under the current conditions.