Category Archives: Investment

Silver is making a strong comeback at the start of 2025, following a challenging year-end performance in 2024. 

There is good reason to suspect that bullion banks have deliberately driven gold and silver prices lower at the close of 2024 to “paint the charts” and influence the yearly closing prices. 

This tactic seems plausible, given the solid gains in gold and silver posted throughout the year—26% and 21%, respectively. With the new year underway, the stage is set for the gold and silver bull market to regain momentum and potentially exceed last year’s performance.

Although silver broke below its uptrend line on December 18th, it appears to have formed a double bottom and rebounded off the downtrend line that began in May. 

To confirm that the sell-off is truly over and silver’s rally is ready to resume, I would like to see it close back above the uptrend line, effectively negating the December 18th breakdown. Following that, a convincing close above the $32–$33 resistance zone—an area that has posed a significant challenge for the past seven months—would strengthen the bullish case. 

If silver can sustain a close above this key level, it should pave the way for a rally to $35, $40, and ultimately higher.While silver has remained stagnant since late October, there’s reason to believe this is merely another consolidation phase, similar to those seen a year ago and during the past summer. 

If history repeats itself, and a breakout occurs, silver could be poised for another strong rally, just as it did following the previous consolidation periods.I closely monitor gold, as it, along with copper, plays a significant role in influencing silver prices. 

Currently, COMEX gold futures are trading within a range of $2,550 to $2,800. To confirm that gold’s bull market has resumed, a decisive, high-volume close above both the triangle pattern and the $2,800 resistance level is necessary. 

Such a breakout would likely propel gold to $3,000 and beyond in short order, which would prove very beneficial for silver as well.In addition to gold, I closely monitor the price of copper, as it significantly influences silver’s performance. 

For silver to gain meaningful bullish momentum, a strong rally in copper is likely necessary. Currently, copper is hovering near its key $4 support level, and a rebound from this point would be a positive signal. If copper can successfully rally, the next critical test will be the $5–$5.20 resistance zone. 

A decisive close above this range should ignite a powerful copper bull market, which would likely have a favorable impact on silver prices.I’ve developed an indicator to help confirm price movements in silver, called the Synthetic Silver Price Index (SSPI). 

This index combines the average prices of copper and gold, with copper adjusted by a factor of 540 to prevent gold from disproportionately influencing the index. The SSPI closely mirrors silver’s price movement, even though silver itself is not an input. 

The encouraging news is that the SSPI has just bounced off its uptrend line, signaling underlying strength. The next key step is for the index to achieve a decisive close above the 2,600–2,640 resistance zone, which would provide a strong bullish signal for silver.Though silver investor sentiment is currently quite negative, it’s important to step back and focus on the bigger picture, which remains very positive. 

The 200-day moving average of silver prices, which smooths out short-term volatility, is at its highest level since 2013. 

Trends in motion tend to persist, suggesting that this underlying strength is likely to carry into 2025 and beyond.Silver is still on track to break out of its multi-decade cup-and-handle pattern, paving the way for it to reach several hundred dollars per ounce:As silver gains momentum, I anticipate silver miners will thrive, despite their recent struggles. This lag is likely due to silver’s long-term bull market still being in its early stages. 

It will take some time for investors to recognize how undervalued silver mining stocks truly are—but when they do, these stocks are poised to soar. 

Although silver stagnated at the end of 2024, the new year brings plenty of reasons for optimism. Most investors are currently underestimating silver, overlooking its strong overall performance over the past year and dismissing the fact that its bull market is just beginning, with significant potential ahead. 

Now is the time to remain confident and focus on the opportunity that lies ahead.

Personally, I am highly optimistic about silver’s prospects, and the widespread negativity surrounding it only strengthens my conviction from a contrarian perspective—after all, the crowd is typically wrong. Continue reading →

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The stock market’s “systemic problem” is rearing its ugly head again. The 10-year Treasury yield (^TNX) has surged nearly 50 … Continue reading →

This week, we’ll close out our chart analysis for 2024 with a look at a long term combo chart with … Continue reading →

Excerpt from this week’s: Technical Scoop: January Trifecta, Energy Sign, Jobs Week

So how did markets perform in 2024?

Commodities were decidedly mixed. Natural gas (NG) was the big winner for 2024, up 44.5%. NG at the EU Dutch Hub gained 56.0%. Others, we note, were gold +27.5%, silver +21.4%, copper +3.5%, oil +0.1%, while platinum was a loser, down 9.8%. Palladium was also a loser, down 20.2%. Gold stock indices were positive with the Gold Bugs Index (HUI) up 13.3% and the TSX Gold Index (TGD) up 18.4%. Note that the gold stock indices lagged both gold and silver. Energy indices didn’t fare as well. While the TSX Energy Index (TEN) gained 10.4%, the ARCA Oil & Gas Index (XOI) fell 5.3%. Commodities once again should be at the forefront in 2025, with potential upward pressure on energy prices and continued positive up moves from the precious metals.

Selected Commodities Performance 2024

Source: www.stockcharts.com

Noteworthy in 2024 was the performance of the US$ Index. While the US$ Index was gaining 7.2% in 2024, the euro fell 6.2%, the Swiss franc dropped 7.3%, pound sterling was down 1.7%, and the Japanese yen was off 10.3%. The Canadian dollar fell about 8.0%. Given wars, economic problems and more, funds flowed into the U.S., sparking demand for U.S. dollars. Funds primarily went into the stock market as the investors feared U.S. bonds, given the massive size of the U.S. Federal debt (123% of GDP) and the potential for even larger increases in debt. Despite the massive flow into U.S. dollars and the U.S. stock market, gold did exceptionally well. If the U.S. dollar is rising, gold normally falls moving inversely to the US$. The same occurs with interest rates as long-term U.S. interest rates rose despite the Fed cutting rates. Gold, instead of falling against rising U.S. interest rates rose and a US$ Index, rose instead. The 10-year U.S. treasury rose in yield by 18.3% (prices that move inversely to yields fell 4.1% in 2024) before considering the coupon. Gold rose 27.5% in 2024. Gold is a currency and a contrarian signal.

Read the FULL report here: Technical Scoop: January Trifecta, Energy Sign, Jobs Week

Disclaimer

David Chapman is not a registered advisory service and is not an exempt market dealer (EMD) nor a licensed financial advisor. He does not and cannot give individualised market advice. David Chapman has worked in the financial industry for over 40 years including large financial corporations, banks, and investment dealers.  The information in this newsletter is intended only for informational and educational purposes. It should not be construed as an offer, a solicitation of an offer or sale of any security.  Every effort is made to provide accurate and complete information. However, we cannot guarantee that there will be no errors. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of this commentary and expressly disclaim liability for errors and omissions in the contents of this commentary.  David Chapman will always use his best efforts to ensure the accuracy and timeliness of all information. The reader assumes all risk when trading in securities and David Chapman advises consulting a licensed professional financial advisor or portfolio manager such as Enriched Investing Incorporated before proceeding with any trade or idea presented in this newsletter. David Chapman may own shares in companies mentioned in this newsletter. Before making an investment, prospective investors should review each security’s offering documents which summarize the objectives, fees, expenses and associated risks.  David Chapman shares his ideas and opinions for informational and educational purposes only and expects the reader to perform due diligence before considering a position in any security. That includes consulting with your own licensed professional financial advisor such as Enriched Investing Incorporated.   Performance is not guaranteed, values change frequently, and past performance may not be repeated.

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