Are the Silver Bulls Back in Control?
StockNews
Published Oct 20, 2021 03:40PM ET
Updated Oct 20, 2021 04:00PM ET
Are the Silver Bulls Back in Control?
Silver (SLV) has been on a tear over the last week, and it looks like a bottom may be in. Taylor Dart breaks down whether or not this is a good time to buy.It’s been a volatile 3-week stretch far for the precious metals sector, but after a tense battle at the $22.00/oz level, the bulls seem to finally have the upper hand in the silver (SLV) trade. This is since silver has recovered nearly all of its 7% loss in September, up nearly 8% month-to-date. The recovery is partially attributed to the fact that bullish sentiment readings continue to sit at their lowest levels in years. When we see extremes in sentiment, markets are very prone to violent moves in the other direction. The other potential boost to the silver price is the most recent inflation reading, with the annual inflation rate coming in at a 13-year high at 5.4%. In inflationary environments with negative real rates, precious metals typically perform well, and this is certainly the environment we’ve found ourselves in currently.
This strong fundamental backdrop combined with extreme pessimism can breed strong forward returns; hence a buy-the-dip strategy makes sense as we head into a stronger seasonal period for the metal. Let’s take a closer look below:
(Source: EquityClock.com)
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