Commodities: Silver
The commodity that has caught our attention the most over the last couple of weeks is precious metal silver although gold hasn’t yet managed to regain its mojo in quite the same manner. In our opinion, as bond yields approach a top and the $US a similar inflection point the backdrop will grow for a strong recovery by the likes of gold & silver with the latter already starting to shine.
Silver and gold both fell over 1% on Friday as a rising $US weighed on the precious metals, in a similar fashion to how we can see a final rally in the $US & bond yields silver looks set to retest the $US18 area.
Precious metals have failed to live up to their reputation as a hedge against inflation with silver falling well over 20% from its 2022 high, weighed down by rising interest rates, a strong $US. However we believe there’s light at the end of the tunnel as small position traders are abandoning the precious metal ship on mass, this hot and generally less informed money has fallen to its lowest exposure to sliver in a number of years i.e. a bullish sign for MM.
