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The Bullish Case for Silver and the Even More Bullish Case for Silver Stocks

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Silver mining stocks continue to show exceptional strength.

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So, have we just seen a bottom in silver? Most likely yes. Silver was about to move higher due to the cyclical turning point. It also reached our target area, so we believe it's now ready to rally once again.

Now, let's have a look at the white metal from the non-USD perspective to see whether the significant drop in silver's price that took place on Friday is visible in other currencies than the US dollar. It is a non-USD silver chart, meaning a weighted average of silver priced in different currencies, other than the USD – the weights are as in the USD Index, so this charts is similar to the one featuring silver priced in euro.



On the above chart, the final bottom also seems to have almost or already been reached. The implications are bullish.

While the decline in the white metal's price was significant indeed, we would like to draw your attention to the silver mining stocks chart, where we'll see that the corresponding decline was not at all that big.



Today we again include the long-term Global X Silver Miners (NYSEARCA:SIL) chart. The rally seen last Wednesday was truly spectacular and so was the lack of decline on Thursday. Moreover, the drop in price on Friday was nowhere near the magnitude of the corresponding move in the underlying metal! This is an important achievement. The silver miners held their gains, being pretty much flat on Thursday when gold miners declined. There is exceptional strength in the silver stocks right now.

Perhaps we are close to the last call for purchasing silver stocks before the huge rally truly begins. While their price levels could move down a bit if gold and silver decline, it will probably be to a minimal degree. It seems that the rally will be significant and it appears too risky to wait for slightly lower prices.

Summing up: The white metal seems to have already bottomed and the rally seems to be just around the corner. Silver mining stocks continue to show exceptional strength and the outlook remains bullish.

For the full version of this essay and more, visit Sunshine Profits' website.

Twitter: @SunshineProfits
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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