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Silver is ready to move higher (from IKN674)

The main note from IKN674, published Sunday, was nine pages long and went into detail about the fundamentals of silver and pointed to the growing evidence why silver looks ready to break higher so yes indeed, this desk is now bullish on the Jekyll & Hyde metal. Others can base their bullish silver arguments on technical analysis, conspiracy theories, a-wing-and-a-prayer, or even the struggle of the masses for financial freedom against their overlord oppressors. Round here we stick to fundamentals and real world financial evidence. What’s happening in 2q22 is a long way from the SilverSqueeze stupidity of 2021 and there’s good reason to believe silver is about to move up, possibly sharply too. Here’s how the note began:

Silver is ready to move higher

Last weekend’s intro revisited the contentious and often misunderstood subject of silver price action and alluded to my growing bullish sentiment for the price of silver. This weekend we go deeper via a look at the fundamentals of the silver market, something we’ve done on an irregular basis for over 300 editions of The IKN Weekly. The occasional series on silver’s fundamental drivers began back in IKN369 dated June 5th 2016, a long treatise that’s held up well over the years, even if I say so myself. Not much has changed since then and, on giving IKN369 a quick revisit this weekend, along with the four-cornered argument we featured charts that recorded a gold/silver ratio bouncing around 80/1, the same level we have today. In the years since, the silver sector has been treated to lavish helpings of Hopium from the legion of permabulls that inhabit this particular and peculiar sector, as well as the rise and fall of gurus  and acolytes or anyone foolish enough to believe constant predictions of Jam Tomorrow. The internet is full of false prophets, soothsayers and conspiracy theorists who for some reason have a special attraction for silver and its market. No end of essays, YouTube videos, Tweets and what-have-you get published about silver’s Rigged Market and how, in a bright day for all humanity, the dishonesty of The Powers That Be will give way to a new price paradigm, often coming with three figure dollar price predictions for the metal.

The IKN Weekly has never bought into the nonsense. However and it must be said, silver also has occasionally run significant price moves over the last five or six years, enough to move the underlying stocks and provide strong trading and investment gains for speculators with the stomach to handle the innate volatility of the silver sub-sector. Therefore we can state:

  • Silver’s conspiracy theorists, soothsayers, “silver squeezers” and social media permabull gurus have been dead wrong over an extended period of time. These people should not be taken seriously.
  • Silver has periods in which the price moves sharply and offers strong trading gains. There’s money to be made, so take that seriously.

One should not be confused with the other, so without lapsing into hyperbole the reasonable metals market observer should be on the lookout for moments in which silver looks ready to move, due to its (in)famous potential for out-sized gains in a reasonably brief period of time. I believe we’re close to one of those moments, the rest of today’s main fundies analysis piece tries to explain why.

20 Comments

    A Beaten Down Prospectors Cabin In The Woods The Deep Dark Woods of British Columbia 19/04/22 3:10 pm

    Zinc looking even hotter ….

    https://tradingeconomics.com/commodity/zinc

    Silver-Zinc combo’s looking potentially interesting

    Reply

    Another great market call by the meister of great calls…..NOT! Stick to your core competency……music and journalism, in that order.

    Reply

      You came all the way over here to say that? My, you must be fun to live with. I mean, seriously, stop wasting your days. If you’re like this with me, you’re like it with everyone, including people who give a hoot about your existence. Take a hard look in the mirror.

      tu envidia es mi progreso

      Reply

    And the music isn’t that great either although I liked that Pulp song you posted about 5 years ago. But silver, I just can’t force myself to buy it, in the same way I can’t force myself to ever agree with the idiots who comment on Zerohedge.

    Reply

    Thanks for the article. IMO, platinum is the metal which shall surprise most to the upside. Here in S Africa, folks are talking about it a lot. China is buying all the metal it can get their hands on and will be shifting to plat catalytic converters in the near future. I have actually sold some gold this week for platinum as the ratio again is almost at 2/1.

    Reply

      The thing that puts me off Pt is overground inventory, which is still around even after the recent fun and games. That said, it’s been nagging at me for a while, too. The weekly followed its and Pl’s price action in the weeks following the first news of the Russia’s incursion, as a possible way to play the geopolitics (Norilsk and all that), but i abandoned the idea without making a trade because ultimately, I’m dumb about the metal. Both of them in fact, only know enough to be dangerous to myself. But yeah, can’t help but suspect Pt will run hard at some point and I prefer its potential to that of Pl. However neither of them is the same market as gold, they’re more akin to a thinly trading silver alternative.

      Reply

    What do you think of Alexco Resource (AXU) at sub $1.40 if the silver price does move higher from here? Thank you.

    Reply

    Silver does look bullish from here. The question is, does it have the power/momentum to break the recent $30 highs?
    I’m not so sure.

    Reply

    nice call on Silver!

    Reply

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