from Silver Doctors:
Friday Wrap: Um, so if you’re not on silver’s side, you might want to raise that white flag right about now. Silver is about to make things really messy…
This morning I asked if silver might test a 16-handle based on a new possible contrarian indicator? So far my theory is wrong, but either way, we’re down, and it hasn’t been an easy day to sit through.
But we need to look at the bright side – we’re above $17, and believe it or not, the momentum is ours. Now sure, there’s no way to give a post-game pep talk game after losing game, but things are looking up.
Don’t just take my word for it, but let the charts do the talking for you.
First, however, a little background for those who may be new to the precious metals.
Generally speaking, in theory and in practice:
Silver is gold’s volatile little sibling. Gold gets moving in a direction, then silver plays catch-up and starts moving even faster in that direction. Silver then reverses first (because of the volatility), and starts moving faster than gold in the other direction.
I’m sure I’ve jumbled, and mumbled, and couldn’t talk my way out of a wet paper bag with that explanation, so let’s just look at the point I’m making as it related to the 2011 run up in price:
You can see in that in mid-2010, price really started moving in gold, but silver lagged.
Silver was in a sideways channel for most of the year actually in 2010. But in late 2010, silver finally woke up from it’s slumber, and being the little ball of energy it is, silver started to seriously outperform gold in terms of price action.
Notice, however, that silver peaked out in late April of 2011, but gold continued its rally for five more months.
Now, nearly everybody agrees that gold & silver bottomed in December of 2015. After three painful years, here we sit in the spring of 2018 wondering when we’re ever gonna get our day in the sun.
Well, gold solidly performed last year, and this year gold has slowly but surely been gaining ground in terms of price, and gold has also been outperforming silver. But all of that started to change this week.
This looks like the week that silver finally takes over the reigns and starts to outperform gold in a big way.
Here’s how that out-performance looked this week:
Is this the start of silver’s catching-up to gold in terms of performance?
I think it is, not only because it’s the natural course for silver (since silver is such a smaller market than gold, it takes less currency to move the price), but because of that spec net short position on the COMEX.
Time will tell if I’m right, but so far, so good.