The bulls in the precious metals space enjoyed a brief departure from the violent selling pressure they’re experienced all year, but unfortunately, it’s been short-lived. This is evidenced by silver (SLV) plunging more than 5% thus far this week and gold (GLD (NYSE:GLD)) sliding more than 3%. These unpleasant returns are despite negative real rates continuing to remain deeply in negative territory, which is typically a positive backdrop for the precious metals. While many investors are likely frustrated by the selling pressure, it’s important to note that nothing goes up in a straight line, and these pullbacks are entirely normal, as long as key support levels are held. For now, silver continues to hover above its key support area at $22.00/oz, and key ratios also continue to remain in a positive alignment, with the silver/gold ratio above its multi-week moving average.The bulls in the precious metals space enjoyed a brief departure from the violent selling pressure they’re experienced all year, but unfortunately, it’s been short-lived. This is evidenced by silver (SLV) plunging more than 5% thus far this week and gold (GLD) sliding more than 3%. These unpleasant returns are despite negative real rates continuing to remain deeply in negative territory, which is typically a positive backdrop for the precious metals.
While many investors are likely frustrated by the selling pressure, it’s important to note that nothing goes up in a straight line, and these pullbacks are entirely normal, as long as key support levels are held. For now, silver continues to hover above its key support area at $22.00/oz, and key ratios also continue to remain in a positive alignment, with the silver/gold ratio above its multi-week moving average. This suggests that this is merely a shake-out vs. a continuation of the 2021 cyclical bear. Let’s take a closer look below:
(Source: TC2000.com)