From the desk of Tom Bruni @BruniCharting
Every week I go through my chartbooks and think about what should be highlighted as our “Chart of The Week”, something that speaks to a theme that people need to know about.
Sometimes I have trouble choosing just one chart, but this week it’s a no brainer in my opinion.
For the last 5-6 years, Palladium has been the only game in town when speaking about trends within Precious Metals, but that all changed when Gold broke out above long-term resistance near 1,360-1,380 in June.
The problem since has been a lack of confirmation from risk appetite measures like Junior Gold Miners/Gold Miners and the Silver/Gold ratios, which continued to trend lower as Gold rallied.
From an intermarket perspective that’s concerned us because if this is going to be a successful structural breakout and the beginning of a new long-term trend in Gold, we need the rest of the Precious Metals space to pick up as well…with Silver leading.
So that brings us to this week’s chart, Silver Futures, which are breaking above a confluence of resistance near 15.50-15.75. Momentum is also getting back towards overbought conditions after maintaining its bullish range throughout 2019. These are the things we’ve been waiting for to confirm a structural trend change in Silver is underway.
Click on chart to enlarge view.
To me it looks pretty simple. As long as Silver is above 15.50, this trend reversal is intact and we need to be erring on the long side.
In addition to being positive for Silver itself, continued strength here and in other “riskier” ways of expressing it like Junior Miners is a tailwind for the thesis that this is indeed the start of a Precious Metals bull market.
Tonight in our Members-Only Conference Call we’ll be discussing Precious Metals and many other actionable themes/trade ideas.
Thanks for reading and let us know if you have any questions!