Silver: The Resurrection Begins Now

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Published : August 24th, 2021
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Category : Gold and Silver

From a technical, cyclical, and fundamental viewpoint, gold is in a fabulous position for price appreciation against American fiat currency.

The wonderful “bull flagification of gold” chart.

Months ago, I suggested that late August would see a fade in Corona cases bring a revival in Indian gold demand. It’s happening now, and at a time when seasonal buying tends to strengthen.

Concerns about inflation and the botched US government withdrawal from Afghanistan add to the very bullish mix of fundamentals.

The bottom line is that the short-term gold chart looks fabulous and the weekly chart… even more so!

Note the fresh buy signal in play on the 14,5,5 Stochastics oscillator at the bottom of the chart. That’s the first significant “green shoot” for gold since early March.

From here, a surge to $1830 and $1920 seems likely.

The incredible big picture gold chart. In 2012, I suggested that a massive inverse H&S bull continuation pattern would likely form on the weekly chart, and that’s playing out beautifully.

Not surprisingly, these gargantuan price patterns require enormous amounts of investor patience. The “head” of the pattern alone took about six years to form.

The good news is that the short-term charts suggest that a breakout from the huge right shoulder is going to happen soon!

The Nasdaq ETF moving averages chart.

Gold bugs tend to get nervous when the stock market falters, but the Fed has jettisoned hawkish plans whenever the market has even a tiny dip.

The Fed has morphed into a disgusting fiat welfare office for the elite. There is no QE for gas at the pump, property taxes, groceries, car repairs, or the credit card debt of regular citizens.

It claims to be supporting the economy, but all the US central bank really supports is rich stock, bond, and real estate investors who are terrified of a bear market.

A Fed that supports these spoiled brats doesn’t need to be audited. It needs to be shut down.

I’ve suggested that the US stock market will likely collapse in a kind of hybrid of the 1929 and 1966 bear markets, but not until 2022.

The collapse is likely to be war and inflation oriented. That means that gold, silver, and miners could become institutional darlings, something that hasn’t occurred

since the 1970s!

A week ago, I suggested gold stocks offered investors only a “Grade C” buy opportunity.

Given the positive action in India, stickiness in inflation, US failure in Afghanistan, Fed cowardice, and the fabulous Stochastics buy signal on the weekly gold chart, I think GOAU, GDX, GDXJ, SIL, and the CDNX (and component stocks) now get a decent “Grade B” rating.

Stoploss enthusiasts can take note of the GOAU low at about $17.25. A rally towards resistance at $20 seems plausible.

The weekly silver miners ETF chart. Rectangles tend to consolidate an existing trend, basis the Edwards & Magee handbook of technical analysis, and there’s a big rectangle in play for SIL right now.

Silver has never regained the lustre it had in the 1970s, when Main Street America lined up to buy the “working man’s metal”. In 2011, gold was about double its $900 area 1980 high, while silver couldn’t exceed its $50 high. The good news is this:

As the next phase of the destruction of the American fiat empire gets underway, I’m predicting a major silver market “resurrection”.

The stock market declines in the 1970s brought Main Street into silver, and 2022 is almost certainly going to see something very similar start to occur!

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form, giving clarity of each point and saving valuable reading time.
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