TradersClass

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Is Silver ready to soar...? Print
Written by Site admin   
Sunday, 05 January 2020 10:07

Is Silver ready to soar...?

 

Happy New Year and thank you for reading over the past year. 2020 is lining up to be a momentous year for politics and the economy and the first quarter could have a Silver lining....

Gold, Silver and Platinum are seen as Safe Haven commodities. When the politico/economic world is in turmoil, investors look for safety and precious metals are in high demand.

So why have the precious metals not taken off yet?

There's not yet enough turmoil. Stock markets are loving the latest round of not QE4. It's currently flooding the interbank market to stave off the latest liquidity crises to avoid a banking collapse (and inflate stocks again).

If, rather when, the next crises hits, western world bubble stock markets will deflate rapidly and Gold will have its day.

It's a Seasonal thing

Most agricultural commodities have a seasonal bias. It's nature's growing pattern that creates it. When the new harvest comes in prices frequently drop with the sudden glut.

A glance at seasonal bias charts reveal it's not only agricultural commodities which have seasonal fluctuations, as this twenty year seasonality chart of Silver shows.

silver

Silver, more so than Gold, usually hits a low in December and then rises into the first quarter of the New Year.

There is fundamental logic to this tendency. Silver is widely used industrially and for jewellery with larger orders placed at the start of the year as forward plans are set.

To where could Silver go?

Today, Silver is languishing at just over $17 on ounce but it's been much, much higher. Way back in early 1980 it took off, peaking at $50. It did so again in early 2011.

silvertrend

Silver has been in a down trend since September. Today that down trend has broken into a probable up trend, as all the Traders Class indicators point up.

Any corrections against this new trend will likely not last for long.

Best Regards

George

 

From the blog

Four Poisons of the Mind

Deep Survival: Who Lives, Who Dies, and Why by Laurence Gonzales (published 2004, W. W. Norton & Company) has many lessons for traders and here is one of them:

There is a Korean martial art called Kum Do. This is a brutal game that involves a fight to the death with very sharp swords. The way it is practiced today is with bamboo sticks, but the moves are the same. Kum Do teaches the student warriors to avoid what are called “The Four Poisons of the Mind.” These are: fear, confusion, hesitation and surprise.

Read more...

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