Silver: Technicals Suggest Very Bullish Long-Term Outlook
It's clear from the charts that silver and silver stocks are in position for a potentially spectacular move over the next three to five years.
We know a few things. First, we are in a new cyclical bull market. Second, we are moving closer to the beginning of the bubble phase in this bull market. Third, in a bull move, silver acts like gold on steroids. It's clear from the charts that silver and silver stocks are in position for a potentially spectacular move over the next three to five years. We believe that the silver stocks can break to new highs in the next 12 months and that silver won't be far behind. The bubble phase is certainly several years away but these charts illustrate the potential for massive breakouts which would generate the momentum that leads into a bubble.
In the meantime, silver and the silver stocks have rebounded strongly. One way to get broad exposure to silver stocks is the Global X Silver Miners ETF (SIL), which lists 25 of the world's top silver mining companies. However, many of the companies on the ETF produce silver as a byproduct of other mining and the ETF has not kept pace with the rise in silver bullion. For pure silver exposure, consider the primary silver producers: First Majestic Silver (AG), Pan American Silver (PAAS), and Silver Standard (SSRI). Two ETFs that track silver bullion are iShares Silver Trust (SLV) and ETFS Silver Trust (SIVR)
Similar to the gold stocks, we see an upcoming pause or pullback in silver stocks over the next month. October is typically a weak month. Many stocks have rebounded substantially and with strong momentum. A pause or correction in October stands between gold and silver miners and a retest of old highs in the winter. It would also mark a great buying opportunity ahead of much higher prices.
Editor's Note: See more from Jordan Roy-Byrne at The Daily Gold.
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