Category Archives: silver-rounds

David Morgan answers a bunch of our questions about Silver. He thinks there could be weakness short-term but remains convinced Silver will blow through $50 and trade in triple digits. Continue reading →

Commodities have done well in September but silver — and natural gas — stand out from the pack for reasons all their own, and show few signs of an end to their price rally.

“September’s commodities market felt like a long-distance race where, after months of pacing themselves, the runners finally kicked into high gear,” said Adam Koos, president of Libertas Wealth Management Group. Continue reading →

For further confirmation, I find it valuable to analyze silver priced in euros. This method removes the impact of U.S. dollar fluctuations, offering a clearer view of silver’s intrinsic strength or weakness. Interestingly, silver priced in euros often respects round numbers like €26, €27, and €28, frequently establishing key support and resistance levels at these points. These levels are worth monitoring closely—take a look for yourself. On Tuesday, silver closed above both the €28 level and a downtrend line that started in May, marking a very bullish development. The final hurdle is for silver to decisively close above the €30 level on high volume, which would be the signal that silver is ready to take off.

Silver mining stocks are also important to watch for confirming silver’s price movements, as they often mirror investor sentiment toward the metal. The Global X Silver Miners ETF (symbol: SIL), the most heavily traded silver mining stock ETF, has been stuck in a flat range since April. A strong, high-volume close above the $36 to $37 resistance zone would signal that both silver mining stocks and silver itself are poised for a significant breakout. After surging last Tuesday, SIL is very close to breaking out.

Similarly, the Amplify Junior Silver Miners ETF (symbol: SILJ)—a key proxy for junior silver mining shares—has been range-bound for the past five months. A decisive, high-volume close above the $13 to $13.50 resistance zone would indicate the start of a rally for both silver mining shares and silver itself. After its sharp rise on Tuesday, SILJ is very close to breaking out.

Gold, a major driver of silver prices, is generating a tailwind for silver after breaking through two key resistance levels in the past month and a half. In a recent Substack piece, I explained how gold’s breakout across multiple currencies sets the stage for an imminent surge toward $3,000.

The gold-to-silver ratio is a valuable indicator for gauging silver’s price direction. A double top chart pattern appears to have formed over the past two months, indicating a likely decline in the ratio. This suggests that silver may soon start outperforming gold. A close below the 83 to 84 support zone is key to confirming the start of a silver rally and its outperformance of gold. Following silver’s strong performance on Tuesday, the ratio is starting to break below the critical 83 to 84 support zone—an unmistakable sign of strength for silver.

The price of copper is often an underappreciated factor in silver’s performance. Copper’s decline over the past several months has dragged silver down with it, but the copper rebound I’ve been anticipating following a technical breakout should significantly strengthen silver’s rally.

Another potential bullish factor for silver, gold, and copper is the prospect of a weaker U.S. dollar as the Federal Reserve begins its rate-cutting cycle. Since commodities typically move inversely to the U.S. dollar, this is a critical development to monitor. The key level to watch is the 100 support on the U.S. Dollar Index. A close below this level would strongly suggest a continued decline toward the 90 support level. At the time of writing, the U.S. Dollar Index is trading at 99.95.

As silver nears a critical breakout, the convergence of multiple indicators signals a strong bullish outlook. Recent economic developments, such as the U.S. rate cut and China’s stimulus measures, have fueled momentum in commodities like silver, gold, and copper. Silver’s ability to break through key resistance levels, both in U.S. dollars and euros, alongside potential strength in silver mining stocks and a weakening U.S. dollar, reinforces the bullish outlook. As the gold-to-silver ratio shows signs of decline and copper rebounds, the stage is set for silver to make significant gains, with $50 as a key intermediate-term target. Investors should keep a close eye on these developments as silver’s next major bull market may be just days away.

If you enjoyed this article, be sure to check out my recent piece, “Why Another Chinese Gold Mania May Be Starting.” Continue reading →

The latest reading of the Fed’s preferred inflation gauge showed prices increased at a slower pace than expected on a monthly basis in August.The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 0.1 % from the prior month during August, below Wall Street’s expectations for 0.2% and the 0.2% reading seen in July.Over the prior year, prices rose 2.7% in August, matching Wall Street’s expectations and coming in higher than 2.6% seen in July. On a yearly basis, overall PCE increased 2.2%, its lowest annual increase since February 2021.”We’ve come on a string of pretty good inflation readings over the last several months, and that was coming after an acceleration in inflation in the first quarter,” PIMCO economist Tiffany Wilding told Yahoo Finance. “So I think fed officials are pretty feeling pretty good about where inflation is sitting.”The report is the first look at inflation since the Federal Reserve cut interest rates by half a percentage point on Sep. 18. In a press conference after the decision, Powell noted the Fed now has “greater confidence” in inflation’s path down the central bank’s 2% target.Powell argued that further cooling in the labor market is now as big of a concern for the Fed as inflation.”The upside risks to inflation have really come down, the downside risks to employment have increased,” Powell said. “And because we have been patient and held our fire on cutting — while inflation has come down, I think we’re now in a very good position to manage the risks to both of our goals.”Friday’s data now comes as investors debate whether the Fed will cut interest rates by 25 or 50 basis points at its November meeting. Following Friday’s release, investors were pricing in a 54% chance of a 50 basis point interest rate cut, above the 50% chance seen a week ago, per the CME FedWatch Tool. Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, Wednesday, Sept. 18, 2024. (AP Photo/Ben Curtis) (ASSOCIATED PRESS)Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.Click here for in-depth analysis of the latest stock market news and events moving stock pricesRead the latest financial and business news from Yahoo Finance Continue reading →

Gold is one of the best-performing asset classes year-to-date, outperforming U.S. and international equities and bonds, commodities and other real assets (broadly speaking). Continued global central bank buying and heightened geopolitical tensions were among the key drivers of gold’s strong returns earlier in the year. More recently, the U.S. Federal Reserve’s (Fed’s) pivot on interest rates and nascent signs of returning investment demand have been more prevalent drivers and could, in our view, lead to even higher prices in the near-term. Continue reading →

(Reuters) – Silver prices have bubbled up to their highest in over a decade on the back of bullion’s stellar bull run and China’s stimulus measures, although some analysts expect the rally to fade as industrial sector demand remains a concern. Continue reading →

Don’t overlook silver.

Gold has been in the spotlight this year. The yellow metal has set multiple records and has outperformed a red-hot stock market.

Meanwhile, in the shadows, silver has enjoyed a nice run-up of its own. The white metal is up 29 percent year to date, about the same as gold in percentage terms.

And this silver bull may have an even brighter road ahead of it than gold.

According to analysts at UBS, silver will likely outperform gold over the next 12 months.

Bullish on Gold!

It’s not that UBS has soured on gold. In a recent note, analysts said plenty of momentum remains with the Federal Reserve pivoting into an easing cycle. And there are other bullish factors in play as well.

“It’s not just the expectations of lower yields at play, with further support from macro and geopolitical uncertainties, and the continuing trend of USD diversification by central banks.”

The UBS analysts said that the geopolitical uncertainty and tension are “likely” to extend into 2025, “with the next U.S. government (and its policies) uncertain.”

“We expect gold to remain a favored market hedge for both geopolitical and rate risks. Historically, the metal has outperformed equities during periods of elevated volatility, which again proved to be the case in recent months despite a less dovish market consensus on the pace of Federal Reserve rate cuts ahead.”

Even More Bullish on Silver!

Although silver has kept pace with gold this year, most people perceive it as lagging.

And silver is underpriced compared to gold from a historical perspective.

As the UBS report notes, the gold-silver ratio is extremely wide. It is currently over 84:1. That means it takes over 84 ounces of silver to buy one ounce of gold.

To put that into perspective, the average in the modern era has been between 40:1 and 60:1. 

Historically, after widening, the ratio has always returned to the mean. And it has done so with a vengeance, sometimes even overshooting that mean. The ratio fell to 30:1 in 2011 and below 20:1 in 1979.

UBS analysts expect the gold-silver ratio to narrow over the next 12 months, likely dropping back into the 60s. That would mean a significant rally for silver, even as gold continues to climb.

“We maintain our view that silver is set to benefit from a rising gold price environment, which is aligned with Fed policy easing.”

The UBS report also notes the favorable supply and demand dynamics.

Silver demand outstripped supply for the third straight year in 2023 as mine output dropped and industrial demand set a record.

“Our expectation that the silver market will remain in deficit over the coming years implies continuous declines in above-ground inventories, which should help fundamentally underpin prices as well as act as a tailwind for investor interest.”

UBS’s projections fit with historical trends.

Silver has historically outperformed gold in a gold bull market, particularly in the later stages. For instance, gold charted a gain of around 40 percent during the pandemic. Meanwhile, silver was up a whopping 141 percent.

Technical factors also signal a looming gold breakout, with a secular cup and handle pattern in play.

History, fundamentals, and technical factors all look bullish for silver. Wise investors are paying attention. Continue reading →

(Bloomberg) — Applications to refinance mortgages surged for a second week as more Americans capitalized on the cheapest borrowing costs in two years.Most Read from BloombergThe Mortgage Bankers Association’s refinancing index jumped 20.3% in the week ended Sept. 20 to the highest level since April 2022, the group said Wednesday. The contract rate on a 30-year fixed mortgage eased 2 basis points to 6.13%, the eighth straight weekly drop and the longest stretch of declines since 2018-2019.That helped boost the group’s home-purchase applications index by 1.4% last week to the highest level since early February. The fifth straight weekly advance in the measure points to burgeoning demand in a housing market that’s gradually finding some footing.At the same time, home financing costs may start to stabilize. Yields on the 10-year Treasury note have edged higher in the last week as traders debate the magnitude of Federal Reserve’s expected interest-rate cut in November as well as the path for reductions.The average contract rate on a 15-year mortgage and the five-year adjustable-rate mortgage ticked up last week after sharp declines in the prior two weeks.The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.(Adds graphic.)Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. Continue reading →

Source: www.stockcharts.com

Gold has responded positively to the Fed rate cut. The cut helped lower the US$ Index, which is positive for gold. The result was gold soared to another new all-time high, closing at $2,646. $2,700 is on the radar. Nothing like an aggressive rate cut by the Fed to get things going. But the gain on the week was only about 1.4%. Silver also rose about 1.4%. However, platinum continues its woes, losing 2.5%, and is down 4.0% on the year compared to gold, up 27.7%, and silver, up 30.8%. Copper gained 2.5% and appears to once again be breaking out. We saw up moves on a number of copper-based stocks this past week.

Other reasons gold is pushing higher are the escalation of the wars between Russia/Ukraine and Israel/Hamas/Hezbollah, Houthis and, indirectly, Iran and Syria. Economist Martin Armstrong (www.armstrongeconomics.com) reported on his private blog that a munitions dump north of Moscow was hit using British-made, long-range missiles that may have contained nuclear components because of the huge hole they left. This is not verified, but does highlight the potential for a major escalation in that war. In the Middle East there is very little sign that the sides are even talking. Peace is further away than ever, given the attacks against Hezbollah this past week. Gold is a geopolitical safe haven.

Domestically, it is the same, as violence is rising as we get closer to the election, an election sure to be challenged if Trump loses and possibly as well if Harris loses. Neither side has even the remotest of will to talk to each other. Talk of clashes between the sides is also dominating the discussion. The assassination attempts against Trump also highlight the gravity of the situation. Gold is a safe haven from domestic politics as well.

Finally, as we have noted before, central bank buying of gold continues as they try to exit U.S. treasuries. The U.S.’s thoughts of moving $300 billion of seized Russian assets to Ukraine has made numerous countries nervous, prompting the purchase of gold. Russia is also doing business in gold rather than in U.S. dollars since they have been removed from SWIFT. That allows Russia to continue trade and avoid sanctions.

The gain this year for gold is the largest since 2010, yet we see few signs, if any, that gold has topped. The RSI has risen into overbought territory, but we’ve seen in the past that this condition can remain longer than the shorts can stay solvent in a strong market. Forecasts are for gold to hit $2,700 by January 2025, possibly sooner. The massive cup and handle pattern that formed between 2011 and earlier this year projects up to at $3,100–$3,200. If that level was taken out, the next stop could be $3,800.  

Downside under $2,450 could suggest further losses, but under $2,300 would suggest that the rally is over. The reasons for holding gold continue to pile up. Yet gold today remains very under-owned, especially in North America. The biggest fear is governments putting controls on gold, as gold moving higher shows a lack of confidence in governments. We continue to see higher prices ahead accompanied by periodic sharp pullbacks.

Source: www.stockcharts.com

When bullion rises, who leads? It should be silver. But silver also leads to the downside. The much-despised gold/silver ratio is still extremely high, at a too-high level that is currently 84. It peaked at 127 during the height of the pandemic. In 2011, at the top of the market for gold and silver, the ratio was about 31. The all-time low was 15.6, but that was way back in 1980. Today, silver would need to be at $169 to reach that level. We have a long way to go. Even the most recent lows of 64 in 2021 and 73 in July 2024 are a way away. Silver did not lead this past week, but at least it tied gold’s gains of about 1.4%. We appear to be breaking that downtrend line from the May top. The close at $31.50 does suggest we should take out the July top with potential targets up to at least $37 and possibly up to $40. Support is now at $30, but a breakdown under $26.50 would be highly negative with the first warning sign at $28.

Source: www.stockcharts.com

Gold stocks continue to climb, although the pace this past week was no doubt painfully slow for many gold bugs. Still, we once again made 52-week highs so there were some positives. On the week, the TSX Gold Index (TGD) rose just under 0.3% while the Gold Bugs Index (HUI) was up a feeble 0.05% or generously rounded to 0.1%. We remain well between the rising channel that looks a bit like an ascending wedge (bearish) triangle. The top of the channel is up around 390/400. The breakout from a huge symmetrical triangle in July 2024 with the start of the triangle dating back to 2015 is projected to send the TGD to new record highs at 600–650. The high of the past few years is at 416, set in July 2020, but we are getting close to that one. The all-time high was 455, set back in 2011. We are already through the point that suggests to us that we should see new all-time highs over 455. The TGD currently is down almost 17% from its all-time highs. That’s much better than the HUI, which remains down 49% from its all-time high. Different components account for the difference. The RSI is only at 63, so it has considerable room to move higher before becoming overbought. We expect to see the July 2020 high taken out on this move. Below 350 is a support zone, but under that the correction could be deeper.

Read the FULL report here: Technical Scoop: Positive Curve, Low Inflation, Precious Safety

DisclaimerDavid 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. Continue reading →

Last week, the Federal Reserve made a significant move by cutting its overnight lending rate by 50 basis points. This marks the first rate cut since 2020, signaling the Fed is aggressively supporting the economy amid a backdrop of softening economic data. Continue reading →

One of the most important pieces of economic news has recently been the Fed’s 0.50% rate cut. Gold has therefore touched a high of $2600 per ounce. Some economists predict the $3000 mark is possible as early as mid-2025. Continue reading →