3D illustration of silver bullion bars over a blue background with growing chart. Commodities investment concept, horizontal image.
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I would never have guessed I’d become a commodities enthusiast! I’ve been so anti-commodities over the years that it feels strange to see nothing but major moves in metals like gold, copper, palladium, and silver. However, you have to trade what you see, rather than what you think.
What you see isn’t necessarily what others see. Over the years, I’ve studied the work of my late friend Benoit Mandelbrot, and it has been very lucrative for me, illuminating another aspect of time series. Patterns repeat – and for a reason. The reason is that the same processes are at work, which create what are known as fractals: self-similar patterns.
So I find myself ranting on about metals and drawing charts like this:
The silver chart, with my prediction of its possible trajectory
Credit: ADVFN
This chart is not destiny, but if the future starts to resemble this prediction, imagine it as a map – worth paying attention to.
Unless sanity breaks out, precious metals are likely to remain in a long-term bull market, and at some point, FOMO will strike. When it does, silver will be the fast horse.
Retail investors are a juggernaut, but it takes a lot to engage them. Having said that, I can see from my writings that silver has already captured the attention of a vanguard of investors, forming a growing audience for the “maiden’s metal.” The magic number is, of course, $100 an ounce. Interestingly, that would mean there is merely $5 trillion worth of silver in the world – a little more than the total in crypto, or the combined value of a couple of “Mag 7s.”
It is also noteworthy that 25,000 tonnes of silver are mined each year, about eight times the amount of gold clawed from the earth. It’s been a long time since silver was 8 to 1 with gold, but there is no reason it has to be priced at 90 to 1 instead of between 40 and 50.
It seems obvious to me the dollarwill be ‘soft’ in the coming years, and a fall in the dollar’s value naturally translates into a rise in commodity prices, regardless of fundamentals and use cases.
In any event, as long as gold is on a bull trend, silver will rise. Until gold starts to look tired, silver will continue to attract an ever-growing retail audience and benefit from additional tailwinds.
Disclaimer: I own gold, silver, and other precious metals.