I find the general distaste for precious metals amusing.
It cracked me up when a close friend referred to gold as “hot garbage” at the start of the year. The Nasdaq 100 was trading almost 36% off its 2021 zenith. And gold was within striking distance of its former all-time highs.
Yet gold was trash in this investor’s eyes.
That’s information.
Information that got me thinking about a rally in precious metals…
Gold might churn within a range-bound mess over longer to intermediate time frames. But that doesn’t mean we shouldn’t trade it – or other precious metals.
In fact, I continue to find fresh levels that define outsized risk-to-reward opportunities.
Here’s the Silver Trust ETF $SLV digging in at a critical shelf of former lows:
As long as SLV is trading above 20.50, I like holding SLV in my portfolio with an upside target of 35 (nice profit potential for a commonly discarded investment).
Yes, I think silver is heading back to the 2012 peak!
I highly doubt we’ll witness it tomorrow or even next month. Regardless, I think it’s in the cards. And if silver is heading back to 35, what do you think gold is doing?
It’s probably hitting new all-time highs.
Check out the daily silver futures chart:
Silver is carving out the right shoulder of a potential inverted head-and-shoulders pattern. If and when silver completes this pattern, I imagine fresh decade highs will come faster than most expect.
A decisive close above 26.50 flashes a buy signal with a target of 35.
We now have two ways to play silver: Wait for a breakout in silver futures, or trade against the right shoulder low in SLV.
I have to give it to my friend, gold still hasn’t posted a new all-time high seven months later (though it came close in May).
On the other hand, the Nasdaq has been on fire, having its best first half in history. And it’s now only 7% below its 2021 highs – not bad!
I can’t stop imagining the outrage and disgust investors will have for precious metals if gold prints new all-time highs before the Nadsaq 100.
I like that. And so should savvy precious metals investors heading into Q4.
