From March to August 2020 the precious metals group of Gold, Silver and Platinum had powerful moves up. Gold made a new all-time high when it broke above its 2011 peak. Silver in five months retraced seven years of bear market progress. These could be the first signs of a new multi-year bull market for the precious metals group.
The March to August rally could be the kickoff phase, with the subsequent decline the first buying opportunity.
Almost all markets have seasonal patterns the chart below illustrates the seasonal pattern for Silver.
Note there’s a strong seasonally bearish period from April to June. Yet, during 2020 Silver had a strong move up. Powerful counter cyclical moves are usually a hint of a possible trend change, in this case from bear to bull market. Also note the seasonal decline into late October – early November. Seasonal patterns are not always precise, it’s possible a decline could continue into December.
The next chart courtesy of Trading View illustrates the daily activity of the Silver- Exchange Traded Fund (SLV).
On October 23rd, the daily Stochastic appears to be on the verge of a downside rollover, if so, it could signal the start of the next Silver decline. The logical area for a significant bottom is a Fibonacci .618 retrace of the March to August rally. This is near a shallow correction within the March to August bull run.
Silver should be watched closely. If it declines into the bottom zone within the next several weeks, it could be a great buying opportunity for both Traders and Investors.
Updates on Silver and precious metals group will be coming in the next few weeks.