From the Desk of Ian Culley @IanCulley
It’s still messy out there, no matter where you look.
Signs of strength are fleeting, whether we’re discussing gold, the S&P 500, or US Treasuries. It’s one of the few observations everyone agreed upon last week at the 50th annual CMTA Symposium. (I’ll have more on that later this week.)
Despite failed breakouts and trading ranges ruling the market environment, one bullish data point stand out regarding precious metals…
Silver!
Check out silver futures finding support at a critical polarity zone:
The 24.75 level acted as support last spring before giving way to increased selling pressure. By the end of last year and into early 2023, the same price level became resistance.
This is the principle of polarity in action, as the forces of supply and demand continue to highlight the level’s importance.
I have to give silver the benefit of the doubt as long as it holds above that critical level.
The same is true for the iShares Silver Trust ETF $SLV, as the comparable price stands at 22.50:
Risks remain to the upside if SLV trades above the shelf of former highs from earlier in the year. And the same bullish outlook extends to the entire precious metals space.
It’s hard to carry a bearish outlook for precious metals and their related stocks if investors continue to support higher prices in the high-beta assets, such as silver.
On the other hand, it does not bode well for these metals if silver futures or SLV undercut their respective January 2023 highs. A breakdown in silver implies a risk-off tone entering the market and potential increased selling pressure.
To be clear, silver continues to hang tough. It has not rolled over. And its near-term resilience alone speaks volumes for the bullish case.
Remember, gold hasn’t even broken out yet (in US dollar terms). And no matter where you look, whipsaws and failed moves dot the charts.
Meanwhile, silver is digging in at a logical level of support.
So, while you await a potential upside resolution in gold, you now have a clear level that will provide valuable insight into the near-term direction of precious metals…
The 24.75 level in silver.
Stay tuned!
Thanks for reading! As always, please let us know what you think.
Click here to watch this week’s Gold Rush Video:
And be sure to download this week’s Precious Metals Report below!
Allstarcharts Team
