Just a week ago, we captured the entire precious metals space in a single sentence:
“Nothing bullish is happening for precious metals, while silver slides below multi-year support.”
Is it really that simple?
Let’s take a look at an interesting development in precious metals that might change our minds…
Silver futures stopped falling.
Check out the daily chart below:
Silver is clawing its way back to the scene of the crime after breaking down from a month-long consolidation and undercutting a critical shelf of former lows.
For me, trading back above 21.50 represents a green light – not only for silver but the entire precious metals space.
As I stated last week, it all comes down to risk appetite. Silver bid speaks to a healthy risk-seeking environment favoring all precious metals.
On the flip side, a lack of enthusiasm for the higher-beta play (silver) reminds me that no position is perhaps the best position.
I can’t help but view last week’s action as constructive. Bulls needed to step and support price fast, and they did.
Yes, silver continues to trade below those crucial former lows. But the bulls are knocking on the door.
And we’re looking at only a few days of price action. But every swing higher has to start somewhere.
From the looks of it, silver mining stocks are already getting after it!
The Silver Miners ETF $SIL is reclaiming a key polarity zone marked by the May 2022 pivot low.
If you want to get long SIL against 27.25, go for it! I can justify a long position if it holds above that level. But I will wait for confirmation from Silver futures.
Remember, it’s still a mess out there – for precious metals and risk assets.
I like to keep it simple when possible. The chart of silver fits that bill when it comes to precious metals.
Now that silver bulls have found their feet, can they land a hook?
Whether bulls make contact will mean all the difference for gold and the rest of the space.
