Some thoughts on silver. I just wrote this note to a friend asking about price expectations. Here are my personal views (not investment advice - do your own research):
When we broke out of a 50-year base at $50/ounce, this was an extremely significant technical level. Until that point, gold was leading the pm complex, and had already broken out, but everyone was looking for follow-through from silver. The base was enormous.
The last attempt was 2011, and it took almost 15 years to return. We finally broke in October. Breakouts of this magnitude are powerful, secular, and typically long-lasting (10 years).
What we have seen over the past 12 weeks is an expression of how coiled silver was. We are extremely overbought, likely in a mania phase, and my expectation (and hope, for a healthy market) is that we pull back/consolidate over the next 2-3 months.
The first key technical level after the $50 breakout was $72. We launched to that number, and paused for only a few days. Once we broke $72, my technical target was $109. This is where we closed yesterday, and this is where price discovery is now happening.
We really want a pullback here. If/when price breaks 109 convincingly (particularly on the close) my next target is $163.
Structurally, I expect the terminal expectation for price in this cycle to exceed $300 and probably push towards $500/ounce (multi-year time horizon).
$SI $SLV