It looks like silver is eager to move to the targets we had outlined in our Silver Price Forecast 2022. Not only is silver refusing to move below its multi-year support it is now also confirming a really bullish W reversal. The big bull run is still a little away from us, but the chart has early signs of a confirmation of a big run to start at a certain point in 2022. There really is a reason why we have been covering silver so extensively for almost a year now. Long term, super bullish, similar to gold!
The one really surprising fact about silver’s recent strength is that it did not come driven by intermarket dynamics. On the contrary, the USD was rather flat and bond yields still rather strong (although they are not able to push higher).
So, where is strength in silver coming from?
Presumably, it is coming from (a) fear in the market which is pushing gold higher (b) the chart. The silver chart, as said for many, many months now, is insanely powerful, long term. No surprise that it is refusing to move lower!
The daily silver spot chart with the 3 month cycles annotated show a really bullish W-reversal in the last 5 months. Interestingly, the last cycle as well as the current cycle marked a relative low. Each one came with a bear trap (failed breakdown).
What’s even more interesting is that ‘nobody’ talks about silver. Why should anyone? It’s a forgotten asset that has been going ‘nowhere’ while hot tech stocks were doing crazy things for portfolios, right? Not any longer, as pointed out in The Ugliest Charts Of January 2022.
This really illustrates markets since February of 2021, an important pivot point. There are hardly any sustained trends, big gyrations and rotation is what characterizes these markets. But, also, big consolidations. Silver is one of them. Sooner or later, this silver chart will break out, we can see it coming. It will take time. Better to position yourself early on and, more importantly, give time, plenty of time!
These markets will reward patient investors. These markets will knock impatient investors out of the game.
Silver, if anything, will reward investors are current levels provided they hold for long enough. Buy and hold still works, presumably.
Note that the title of this post takes a long term view. Investors should not be looking at ‘returns’ and illusionary ‘P/L status’ on a month by month basis. We explained this in great detail in Bad Habits: 5 Reasons Why Mobile Apps Are Destructive For Investors. These markets are a hot mess, you want to be looking for long term winners.
In our Trade Alerts weekend updates we cover silver almost every week in more detail. We also run an auto-trading program which executes our signals in members’ accounts (primarily Interactive Brokers and Saxo). Their account has grown in January of 2022, unbelievable but true, without any action on their end. Pretty solid, arguably amazing! More info about our auto-trading program.
