Silver Is Close To Something Big
It is significant to note that silver and the Dow has been moving in similar direction at least since 2019. At some point the two are bound to diverge
It is significant to note that silver and the Dow has been moving in similar direction at least since 2019. At some point the two are bound to diverge
This makes perfect sense in these time, since it is all about the US dollar.
Gold, silver and cryptocurrencies will feast on US Dollar weakness like hungry lions on weak prey.
Often we see a key or big decline in the USD/ZAR ratio just before a massive silver spike.
A breakout at the top blue line could see price going parabolic.
The Dow went from around 2700 at the peak in 1987 (point 1) to a top of more than 29000 in 2020. Silver will do even better.
The recent rally also really ignited when it passed this important level.
A breakdown of the US dollar would be a great confirmation of a sustained silver rally
The conclusion to draw from this: things take longer in the current period, but they go higher.
Until a significant portion of these debts is repaid or defaulted on, it would be foolish to talk about a top in precious metals.
The point is that silver is still really cheap
We are now just after the Dow peak in the current cycle. If the Dow peak in Feb 2020 was indeed the top, then we are likely to see a Silver rally that will at least match the x10 during the period from 1977 to early 1980.
During each credit cycle, Silver and Gold prices mostly loses relative value to assets like general stocks and commodities.
Since the current stimulus (increase in Fed balance sheet) is likely to fail, due to the massive deflationary forces , they are likely to just keep on pumping more and more.
So, for the Silver investor, what the US Dollar index might do over the coming years, is a very important question to answer.
Choose to likely get X10 returns with silver or face the risk of getting your general stock market investments cut by at least 90%, in my opinion.
Historically there is an established pattern of credit extension, during which the Dow benefits proportionally more than Silver prices do. Once the Dow’s rally has run its course, Silver prices catch up while the Dow corrects or goes sideways.
Silver is still in consolidation mode since early September, but could be close to a resolution.