Gold, languishing at a five-month low, still isn’t ripe for buying
By Mark Hulbert
More bearishness needs to set in for contrarians to embrace the precious metal
Source: Market Watch
https://www.marketwatch.com/story/gold- ... 6-91746477
Unlike gold, about 50% of annual silver production gets consumed by various industries, never to be seen again.
About 70% of mined silver are "byproduct." The remaining 30% comes from mines which primarily produce silver itself.
2/3 of primary silver miners have seen their production fall this year. And World Metal Statistics reported that silver production has been adversely affected in some key producing nations in the first eight months of 2017: down 1% in Peru, 2% in Mexico, 19% in Australia, and 20% in Chile.
If silver stocks have bottomed before silver, the stocks may now lead the metal higher.
I think silver is likely to regain its 2017 high of $20.50 in the first half of 2018.
As for the back end of next year, I'd expect to see silver make it into the $22 to $24 range. At the upper end, that's around a 50% gain from where we're sitting this week.
Global X Silver Miners ETF (NYSE: SIL)
The dollar may be completing a bearish technical "head-and-shoulders" formation.
If the DXY closes back below 93, then 91.5 will be the next crucial level to watch. We may have seen an interim peak for the dollar near 95 in early November.
The sell-off action that both gold and silver stocks experienced over the past few weeks looks and smells like nothing less than a capitulation by the weak hands that held these stocks.
I believe, especially if the U.S. dollar continues to weaken, that the next couple of months may produce some impressive gains for this sector.
The dollar may be completing a bearish technical "head-and-shoulders" formation.
If the DXY closes back below 93, then 91.5 will be the next crucial level to watch. We may have seen an interim peak for the dollar near 95 in early November.
The sell-off action that both gold and silver stocks experienced over the past few weeks looks and smells like nothing less than a capitulation by the weak hands that held these stocks.
I believe, especially if the U.S. dollar continues to weaken, that the next couple of months may produce some impressive gains for this sector.
In November, $BPGDM dipped below 30. That’s an oversold condition – indicating that less than 30% of the stocks in the gold sector were trading with bullish technical formations.
But yesterday, $BPGDM turned higher from oversold conditions and generated only its second gold stock buy signal of 2017.
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