Gold's been doing so well lately, you really didn't need any other asset in
your portfolio. I talked about the rise the gold price could see a couple of
months ago in my blogpost
here. Since then it's been doing great. But, there's this other precious metal
that has remained a little dormant on a relative basis and this, this gets
us excited. The metal's known for aggressive volatile moves to the upside. Yes,
I'm talking here about silver. Let's take a look.
The reason why I'm interested in silver is due to that infamous 50 dollar
level in the price of the metal, last touched during the 2011 spike and in
the 1980 Hunt Brothers’ mania, it's a psychological barrier. We're getting
close, and the environment is as good as it's every going to be. Gold's
powering on, uncertainty is king, and once economic activity starts ramping
up again after all this? Then it'd be very difficult to not believe we're
poised to see a secular breakout of the asset.
Take a look at the chart below, slowly getting closer and closer to that 50
dollar level. While gold has already surpassed their previous highs, who's
to say it won't happen to the price of silver soon too?
You can gain exposure directly through futures or ETFs. Or we can take a
look below at some silver mining stocks that look quite attractive in the
longer-term. $PAAS is forming an inverse HS base with quite the growth in
earnings & sales. They've only recently taken over another mining
company (MAG Silver) too so they're very well positioned as one of the
biggest silver miners out there.
Or, we have $AG forming very large contracting volatility patterns. Call
them what you want, coils, symmetrical triangles, it doesn't matter. What
matters is that you have to remember that periods of low volatility are
followed by periods of high volatility, investors will soon decide on which
direction this volatility will be heading towards. Also note, the recent
profitability of the company, a positive EPS in the fourth quarter of last
year and some recently impressive growth numbers in sales too.
This is obviously surface level analysis here but it's a good starting point
if you do think there's something to the potential of a secular breakout in
the price of silver. Also, don’t forget about silver’s cult following. If it
decides to run, it tends to run fast and aggressively.
For now there's still a bit of time to dig a bit deeper in the potential of
the trend and the silver mining stocks. So, what’s your take? Is this a
worthwhile setup from a technical and macro perspective? Let us know!