Will Silver Soon Follow Gold's Lead? / Commodities / Gold & Silver 2019

Gold prices have broken out of amassive multi-year consolidation pattern to the upside. That suggests thepossibility of a massive multi-year rally ahead!

Tobe sure, there is also the possibility of some retracing and back-testing thissummer before the $1,400 level is conquered for good.

Thefall and winter periods are typically more conducive to big precious metalsrallies.

Seasonality,however, isn’t a dependable trading tool. Some technical analysts (who will gounnamed here) wrongly turned bearish on gold and gold stocks after they put ina disappointing early spring performance and were thought to be headed straightinto the summer doldrums.

Instead,the summer solstice arrived with gold’s chart displaying a powerfully bullishlong-term setup.

Theone glaring problem with the current setup in precious metals markets: silverhasn’t yet confirmed gold’s breakout.

Silver needs to break above $15.50,then $16.00 (the last intermediate cycle high) in order to establish a bullishtrend on par with gold’s.

The white metal’s lagging price performance in recentmonths has resulted in it trading at its biggest discount to gold in threedecades.

Hardysilver bugs are excited at this rare opportunity to buy more ounces on thecheap. Others are understandably concerned that silver isn’t showing anyleadership during rallies in the metals sector.

Silver,being a smaller and naturally more volatile market than gold, is supposed toamplify gold’s moves on both the upside and downside. So why is silver insteadacting like an anemic version of gold?

Lotsof reasons can be proffered – from record central bank buying of gold, tosilver’s reliance on industrial demand, to low (official) inflation, to marketmanipulation.

Itprobably comes down largely to investor psychology. When precious metalsmarkets have been out of the “mainstream” news cycle for years – trumped by arising stock market and the rise of digital currencies – the general publicwon’t be interested in precious metals.

Thesuper-rich and large institutional investors who are more apt to takecontrarian positions in overlooked assets generally prefer gold over silverbecause it is more convenient for them to accumulate in large quantities.

Weare still in the stealth phase of a precious metals bull market. When we enterthe public participation phase – and demand for physical bullion increases – wehave no doubt that silver will shine.

Stefan Gleason isPresident of Money Metals Exchange, the national precious metals company named 2015"Dealer of the Year" in the United States by an independent globalratings group. A graduate of the University of Florida, Gleason is a seasonedbusiness leader, investor, political strategist, and grassroots activist.Gleason has frequently appeared on national television networks such as CNN, FoxNews,and CNBC, and his writings have appeared in hundreds of publications such asthe Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2019 Stefan Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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