Commodities: Silver

Precious metals have failed to live up to their reputation as a hedge against inflation with silver falling well over 20% from its 2022 high, weighed down by rising interest rates, a strong $US. However we believe there’s light at the end of the tunnel as small position traders are abandoning the precious metal ship on mass, this hot and generally less informed money has fallen to its lowest exposure to sliver in a number of years i.e. a bullish sign for MM.

Last week we looked at gold in this section, today we’ve switched to its precious metals partner silver which initially surged higher through 2020 / 21 only to consolidate its significant gains over the last 9-12 months. In the text books this would be described as a bullish flag while it can hold above its mid-point around the $US21/oz area. Theoretically we could…

As we touched on earlier it was encouraging to see precious metals rally overnight even as the $US popped higher after the Bank of England restrained from raising interest rates, a major surprise to most economists – I’m thinking the BOE might want to see a clearly defined exit from COVID as the number of cases again rises in the region.