Silver Breaches Key Resistance, Soars To 21-Month Highs Against Gold

Tyler Durden's picture

Silver is up over 11% in the last 6 days (the most since Aug 2013) since Britons decided to leave the sinking ship, pushing the white metal above the key $19.50 level - back to its highest since September 2014. Gold has been in great demand also, heading for its 5th straight weekly gain after its best start to a year since 1980 as one analyst noted "gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check." Silver's recent surge has seen it play catch up to gold, now back at its 'richest' to gold since September 2014.

 

As Reuters reports,

"It seems that investors are pushing both equities and gold higher simultaneously. One of these will eventually have to give, but for the moment, they each seem to be trading on their own dynamics," said INTL FCStone analyst Edward Meir.

 

ANZ analyst Daniel Hynes said bullion's upward rise was just a continuation of its movement following the Brexit vote.

 

"The shock has actually passed but expectations of a rate hike by the U.S. Federal Reserve for the short term has actually fallen quite significantly in combination with the apparent loosening of the monetary policy in Europe driving investor demand," he added.

 

Societe Generale on Thursday raised its gold price forecasts on fears over the ongoing political, financial and economic fallout of Britain's vote last week to leave the European Union.

 

"Looking ahead, it seems that gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check," the bank said in a note.

With Silver catching up to Gold's run...With Silver bursting above $19.50 for the first time since Sept 2014 (before the end of QE3)

 

"Gold has been on an uptrend and silver tends to catch up," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.

Leaving Gold at its 'cheaspest' to silver since September 2014...

 

And finally, it's not just gold and silver, platinum and palladium both rose to their highest since mid-May and were up 1.1 percent and 0.5 percent respectively.

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Money Honey's picture

Finally it’s Clear – The Silver Bull Storms in an Unstoppable Rally

From mid-February gold started to outshine its less lustrous cousin. Silver prices didn’t jump to new highs until mid-April. After another sharp pullback in May, silver is back in action. This time, it’s even sprinting ahead of gold. Silver’s breaking out & not looking back, and this is one of the cleanest breakouts on the market right now. Ride the next wave of the rally. $20 silver is in sight.

http://www.commoditytrademantra.com/silver-trading-news/finally-its-clea...

Silver Breakout Confirms that Gold and Silver Prepared to Move a Lot Higher

The price of silver has just surged to a high it hasn’t seen since January of 2015. In the aftermath of Brexit, this as a good sign that the prices of both gold and silver are about to really break out and begin moving up in significant bursts. Now that gold is holding steady above $1,300 an ounce, investors who have been waiting on the sidelines to buy should consider acting soon.

http://www.commoditytrademantra.com/gold-trading-news/silver-breakout-co...


bwh1214's picture

Time for pm's to take its rightful place as the preferred safe haven asset from bonds.
https://m.youtube.com/watch?v=TQXaY8c7P78

BaBaBouy's picture

There are 10 OZS SILVER mined for Every OZS of GOLD ...

Hellooooooo ...

VinceFostersGhost's picture

 

 

I didn't think there was going to be a math question this early in the morning.

Motasaurus's picture

Nooooo! It's too soon. I need more time to turn my plastic into silver and gold!

AllThatGlitters's picture

What's it going to do today? Let's see:

Live Silver: http://www.pmbull.com/silver-price/

Ought to be interesting. Silver's like 40% off it's low. Yet change that chart from 5-minute candles to weekly candles, and it looks like it's barely gotten started.

Most will flood into silver at the next intermediate top, when premiums have doubled and tripled. Traders are currently standing aside, hoping to buy "buy dips" but will slowly give as prices continue to rise, until the big capitulation on the part of Precious Metal Bears drives it to unprecedented levels. Big money is there already. Speculator sheep still have shorts to cover.

How's that for a cheerleading position?

Haraklus's picture

Traders are currently standing aside, hoping to buy "buy dips" but will slowly give as prices continue to rise
Exactly what I was considering doing.  I wanted to own a bit more (mostly to have a round number) before I started focusing on building a larger cash liquidity position to make it through the upcoming default cycle.  Then I realized I had no guarantee of any future dips actually being cheaper than what we have today.  I always told myself I would keep buying silver in the current market cycle as long as it was under $20 with low premiums.  I decided this may be my last chance before a seismic shift in the capital markets.  
I squeaked in with some 10oz bars @20.04/oz delivered.  Close enough.

Silver is 40% off of its lows, but it's still about 60% less than its previous high.  And the new highs are likely to be higher, given the change in the global monetary landscape.

BaBaBouy's picture

WOW ... SILVER is Rocking Today ...

CMX Paper AG up 81 cents ...

CANADA markets closed.

GOT Phys AG ???

 

SilverDoctors's picture

Silver Fireworks for the 4th!  Love it!  What happened to bankster gettaway day low volume silver smashes?  
The Admiral himself Eric Sprott stated this morning that A HELL OF A SILVER RUN has begun!!!!  

Gonna be cracking open a few cold ones this weekend to celebrate the birth of the new SILVER BULL!!

LawsofPhysics's picture

Yes, but there is almost 25 lbs of silver in every tomahawk missle.  Silver has massive industrial application.  Gold, not so much.

snr-moment's picture

so you're looking for $130 silver?  TPTB would never allow that.

DanDaley's picture

Unless they were going to benefit by it.

Squid-puppets a-go-go's picture

which JPM absolutely is totally positioned to do so. Hell, jpm could even survive a DERIVATIVES MELTOWN if silver goes ballistic

oo did i cough up a spoiler ?

BullyDog's picture

Guys,  chill out.

 

It's friday,, that means,  15 min before end of market.  SMASH down with paper.

I would expect blood on the streets way before the physical is king.  Just remember 0.1 gram of gold or 1 gram of silver for a loaf of bread = end game.

Killtruck's picture

Go baby go!

(at least until they kill Osama Bin Ladin again and throw in three margin hikes in one week to boot...those fuckers) 

AllThatGlitters's picture

Once the cheerleading gets a little too loud, that's when we get a small, buyable pullback.

Gold hasn't been moving as hard, so could do some intraday counter-moves as it was doing the last few days.

Live Gold: http://www.pmbull.com/gold-price/

In a rally like this, the pullbacks are always just a bit too shallow for the wannabe trader dip-buyers, who will continue to stand aside, scratching their heads, watching in frustration as they get left behind, again.

Save_America1st's picture

Gold/Silver ratio (GSR) in March peaked at 83:1.  Since then it has steadily declined and in recent days has dropped from 75:1 to now today it just hit 69:1.

This is the lowest GSR since May of 2015.

Silver has clearly been the real leader since the begining of 2016 and especially over the past 3 months.

This is only the begining.  The GSR will eventually drop to near 30:1 and below once again...eventually.  Just stay strong and be patient.

Hope you've all been stackin' that cheap silver.  Because it's going to be near priceless in terms of fiat in the near future and will be nice as a PM's trade to acquire more phyzz gold to your stack as that GSR continues to drop into key zones below 50:1, 40:1 and 30:1

Silver phyzz is still a steal anywhere below 23/oz or so.  There's really no "real" resistance from here to around 23.50/oz or so other than the criminal Cartel and their limitless fake naked shorts.  But they won't be able to do that for much longer.

Stack until around 23 or so and then wait for a major pull back/profit taking/naked shorting, etc. that could push prices back 19/20 range again.

Then as always...BTFD!!!

Haraklus's picture

Very similar thoughts, although I'm not gonna lie -- I bought the rally this time.  I do think it will prove to be a somewhat suboptimal move, but I don't think it will be a "bad" move.

GSR movements are pretty clear -- during PM rallies, silver rallies more and the GSR drops.  Silver also tends to fall further after the rallies.  It's a straightforward consequence of smaller silver reserves to draw upon due to industrial consumption, and overall smaller market size.

Trubador's picture

Silver is up 43% over the past 6 months (it's low of $13.90 was near the very end of 2015). Today it closed at $19.85.

The normal G:S ratio is approx. 50:1 (give or take 5 points). With Gold ending today at $1345 that means that Silver should be (under normal circumstances) at $26.90 to reach it's standard normalcy ratio.

I expect Gold to continue to rise as this global clusterf**k continues to unfurl.

So, if Gold eventually approaches it's ATH of $1800, then that standard ratio would imply Silver to go to $36. If things really get bad, G$3000:S$60

 

For me, I'm happy that my modest investment has netted me +15% return in purchases made over the last few months.

Argenta's picture

About now is when I wonder why I didn't put my money where my mouth was and allocate even more capital into USLV.

-Argenta

CaptOveur's picture

I did and I'm pretty happy about it. Hopefully it stays that way...

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Argenta Jul 1, 2016 7:46 AM

Levered ETFs are for day trading, you'll get beaten even on a winning move if you hold those levered scam ETF.  Stick with SLV and GLD and lever yourself if you'd like using margin if you must do leverage (I wouldn't recommend playing with leverage at all)

Haraklus's picture

Ew leveraged PM ETFs, that's the most bankster shit I've seen

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Jul 1, 2016 7:44 AM

Might be time to dip a toe into silver although I still think Gold is the better play as silver is still tied to manufacturing and such

AlltheWine's picture

But the ratio of gold vs. silver is breaking down below key l-t support at the moment...

 

http://www.onlypricesmatter.com/2016/06/30/silver-upside-could-accelerat...

hangemhigh77's picture

When do the banksters slap it back down?

The Real Tony's picture

I guess when everyone starts selling all their overpriced stocks to buy gold and silver. The breakout in gold and silver tells you one thing the crash in stocks is near. Expect a true as in real bear market that is 70 percent plus downwards in stocks followed by at least a decade of sideways movement.

LawsofPhysics's picture

Wake me when all those paper claims start demanding delivery of physical!

until then, same as it ever was.

Latitude25's picture

That will never happen.  Those paper metal holders will realize that their paper position is worthless and exit causing a PM price crash with no physical availability at that price.  Two separate markets will then exist, real and paper.

ParticularlyStupidHumanoid's picture

We're basically already there. Some gold products are on back-order. Let this sink in.

Some REAL gold products are on back-order.

Latitude25's picture

To be confirmed by rising premiums for those physical products.  Maybe on ebay.

sessinpo's picture

Everyone already knew that there was not enough physical to cover the paper that is traded.That was never a secret and it shouldn't have been used as a reason or justification for any type of bias towards silver's price. I always ignored when someone commented on this situation. Those trades are zero sum and just transfers of currency between traders. They never intended to take physical.

 

LawsofPhysics's picture

Some minor corrections;

" Those paper metal holders will realize that their paper position is worthless and exit causing a PM price crash with no physical availability at any price"

"markets" in the sense of a mechanism for true price discover are long dead, along with the rule of law.

philosophers bone's picture

So many of the comments on here are bang on - had to stop upvoting because my index finger was getting sore!

We all think that the recent move "vindicates" silver, but the reality is that, like you say, we still don't have true price discovery!  The way things are going with Central Banks going full retard, I believe that there will come a day when large sophisticated parties will not contract in fiat currency unless there is a corresponding right to require alternative (real) consideration.

Only then will we know.....   I believe that day is coming.  Not making predictions when, but I wouldn't be surprised if it was sooner rather than later. 

wisehiney's picture

Beginning to feel like last chance. 

Will wake up one morning soon with no precious available anywhere.

wisehiney's picture

THanks Gartman!

At least one more drop.

Bill of Rights's picture

I own silver but I am more partial to Gold myself.

JPMorgan's picture

Yes I agree, depends on your circumstances though, it is a bit of a balancing act.

The multiplier for the same amount of capital put into silver may well yield a far greater return in the end.

At least that's what I'm seeing here.

PirateOfBaltimore's picture

Agreed.  Before my boating accident I had about 500oz silver and ~20oz gold.  

 

In-the-money on all of my physical, even though it's at the bottom of the lake...

Berspankme's picture

A sad tale. I have similiar quantities and planning maritime activity this weekend. Hope to avoid unfortunate incidents

Franktastic's picture

I have both...but in a shtf situation...I would rather give up an oz (or less) of silver for a horse than an oz of gold.

snakehead's picture

Anyone remember Silver Thursday?

micmac's picture

time to monkey hammering those graph

Silverhog's picture

Warning, Shorting Silver maybe dangerous to your wealth.

techpriest's picture


< Gas to $4+

< Silver to $12

One ratio I use when figuring the price of silver is "a quarter buys a gallon of gas." Right now a silver quarter (~2/11 an ounce of silver, or 1/5.5) goes for about $3.50, and the last time we had this type of disparity silver fell to meet the 1/1 ratio with gasoline.

It's not super scientific, but let's place bets - do you think silver is overvalued and will fall after a year or so, or is inflation going to catch up with everything else like it did during QE?

tmosley's picture

It will diverge as new technology has made oil production cheaper at the same time that global depression has reduced demand.

swmnguy's picture

Funny, I just used 500 words to say the opposite, but I like your analysis too.