opinion

Much ado about silver

Kitco Media
By Jonathan Da Silva
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Kitco Commentaries
Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Friday, I suggested metal bulls still have the power, and for gold, the evidence of that is yet another higher high made overnight. Yesterday morning gold produced a false breakdown (shown on the 2-hour chart below) of the rising uptrend line shown on Friday as well. But prices promptly recovered to resume their uptrend trend; this can be taken as a bullish sign.

Silver bulls, however, were subjected to an outsized and aggressive bout of selling yesterday morning, as the metal left all prior medium-term correlations in the dust, as if it were lifted and transposed out of the existing market to trade in a vacuum; experienced silver traders and investors have no doubt seen this movie before; which tends to roll as a Sunday evening special or Monday morning matinee, the most opportune moment. The below 4-hour chart of silver shows the price breaking down from the box shown on Friday; I thought $22.55 was in range on the breakdown, but sellers couldn’t get the price under $22.75 before the dip was bought (I have covered buying dips multiple times on this run).

I am seeing a lot of speculation about how this setup (breakdown and recovery) in silver is extremely bullish. And while I believe that metals bulls still have the power (as titled on Friday), I would like to see Ag close over $23.90 spot this week to confirm a complete reversal of yesterday morning’s indiscriminate selling - and another run at $24.50, this time.

Thanks and have a nice day,

Kitco Media

Jonathan Da Silva

Jonathan Da Silva developed a passion for hard money and economics from a young age having been influenced by family who sought to teach me that "nothing is free", and the importance of intrinsic value early on. My interest in markets grew keener during the great financial crisis of 2008; leaning on family with vast trading experience, I began to self-educate on technical analysis and economics- drawing inspiration from the works of individuals like W.D. Gann and Adam Smith. I have been a proud member of the Kitco team since 2017 and hope that my writing inspires readers to consider an objective view of the metals, and the greater financial markets.

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