(C) Reuters. Here’s Why Silver Should Keep Moving Higher in 2021
Silver (SLV) is up 10% over the last month. Are these gains just a bounce or the start of a new uptrend? Taylor Dart explains why the bull market may be resuming for the metal.While the major market averages continue to make new highs, the precious metals market has seen a sluggish start to the year. Fortunately, the metals have started off Q2 much better, but silver (SLV) is still underperforming the S&P-500 by more than 1000 basis points year-to-date. The good news is that the recent outperformance has led to many investors giving up on the trade, with sentiment mostly reset from its massive spike in February. This has put the conditions in place for a strong move higher if silver can get past resistance, and one of the best ways to play the sector is junior silver producer GoGold Resources (GLGDF).
(Source: Daily Sentiment Index Data, Author’s Chart)
As shown in the above chart, sentiment for silver has shifted dramatically from early February, with sentiment readings falling from 90% bulls to 30% bulls. As we can see, this has led to a significant improvement in silver’s long-term moving average for sentiment, given that this moving average has plunged from a reading of 79% bulls to 45% bulls. While this reading is not yet on a buy signal and would require further weakness to drop into the buy zone, it is a massive improvement, especially considering that silver made a new multi-year high last week.
Here’s Why Silver Should Keep Moving Higher in 2021
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