It looks like the metals are finally trying to pop out of this six week consolidation pattern
Silver is especially strong and is leading gold today. Gold (the commodity) is +1.0%,, but silver (the commodity) is +2.8%.
The ETF’s that track gold and silver GLD is +0.56% and SLV is +1.74%.
The silver miners (SIL) will usually outperform SLV, the actual commodity. SIL is currently +3.1%.
Silver has seen a nice rally since March and has been pausing the past few weeks. However, the chart says this move likely isn’t over – it looks to be in the process of building the right shoulder of an 8-month inverse H&S pattern. If so, $19.40-19.75 could be the next level, with a “measured move” target of 25 over time. Silver currently trades at $18.60.
If over time, silver can meet or exceed those targets, the best way to play it from a pure alpha angle would be via SIL, the silver miners. Here are the Top 10 holdings in SIL.
To get twice the move on SLV, you can also buy AGQ.
So many of the individual gold and silver names look good here, but you can’t own them all.
As a starter though, and to get overall exposure, my favorites are AGQ and SIL.
You will take a little more risk with AGQ than just buying SLV as it will move 2X what SLV does, but more reward too, if you agree with my thinking on what silver will do over time.
I’ve talked about 2 gold stocks and 2 silver stocks over the past week and a half. WPM, PAAS, GOLD, and KL. All are doing well, but I haven’t formally pulled the trigger although some of you guys have nibbled.
Powell is on deck and its the end of the quarter so I have waited, but I just wanted to keep you posted on what I am looking at.
