Gold & Silver Thoughts From NFTRH126
Ah, here we revisit my personal Waterloo, gold and its relation to silver. NFTRH still
stands by its analysis from NFTRH124, showing gold’s long-term outperformance of
silver and nothing I have seen in silver’s nominal price activity, the SGR or all the
compelling reasons why silver is going not only to $100/oz., but $300/oz. (I saw this last
week in some analysis, the source of which I do not recall). Now, I am also mindful that
the long-term chart in NFTRH124 showed that silver can indeed target $100. But dear
speculators, ‘can’ is a much different word than ‘will’.
The weekly chart of silver shows a hysterical over bought situation and yet poor man’s
gold has only slightly exceeded an upside measured target. NFTRH had previously
plotted 31.50 and 33 estimates, but on this chart I have plotted the actual target, based on
a ‘best case’ measurement.
I do not want to downplay the fierce momentum and in fact, had I done this chart in
linear as opposed to log format, the impulsive rise would look even more extreme. This
is either the gateway to a bubble (easy now, I did not write it is a bubble, I wrote
‘gateway’) or it is a prelude to some tests of moving averages. Silver is strained well
beyond even the most parabolic weekly EMA 10.
Silver bugs needle me in blog comments and possibly some may be glad to shut me up in
their own minds, but really, the silver bull adds numerical value to my finances. I am not
at all against silver. The near vertical leg higher changes nothing; silver is at around an
upside target, everybody has reasons to be bullish and the price action conveniently bears
them out. It could also be a mini mania or the beginning of a really big one, as a world
choked with inflation fear lurches toward silver’s siren call.
In an early NFTRH edition, when the precious metals were decimated in 2008, I
speculated about the possibility of a dot.com style bubble in the sector. As monetarily
sound and buttoned down as precious metals investors see themselves, I would wager that
90% of them greedily await the day the sector goes full dot.com. A lot of shorts got
killed standing in front of the Nasdaq, and so too could the silver shorts be impaled on
that sharp hockey stick up above. Risk all around folks. Ain’t it grand?
Which is why I like silver okay, but prefer the calm of real money and its relative under
performance during inflationary economic growth phases and its significant out
performance during phases when inflationary constructs begin to fall apart. Here is the
old fuddy duddy climbing his way higher in much more boring fashion than his wild little
Which chart looks more sustainable?