Good Morning!

Last week we argued the gold stocks were peaking and a correction could be starting.

Part of why we were wrong is two fold:

Gold had further to run from its breakout (targets of $3750, $3900 and $3950) and Silver had or now has the potential to run to epic resistance at $50. 

We neglected that some intermediate-term peaks in precious metals entailed a mini-blowoff in Silver. 

Follow below for our analysis of Silver & premium snippets....

The best way to mitigate the risk of sector corrections is to buy the right companies and at reasonable prices.

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1) Silver Historical

The circles show breakouts to new all-time highs. 

The first circle was a new modern all-time high, the highest level since the Civil War. 

Silver, which was trading around its 1920 peak, basically doubled in 1967, eclipsing the 1920 peak. 

This lead to a mania in silver juniors in 1967-1968. 

The equivalent today would be a pop to $100. 

The breakout in 1973 led to a 120% pop in 4 months.

2) Silver Quarterly Chart

Silver has 5 more trading days until the end of the quarter. 

The quarterly all-time high is $37.60, with further resistance at $39.95. 

Silver is in position to make a new quarterly all-time high. Closing above $39.95, adds significance. 

Gold closed at a new quarterly all-time high Dec 31 of 2023, but not yet at a daily or weekly all-time high. 

It broke-out for good 2.5 months later.

3) Silver vs. Foreign Currencies

This is Silver vs. inverse Dollar or Silver x Dollar.

It's important because this often leads Silver in US$ terms. 

It reflects strength without impact of weak US$. 

This is monthly data. 5 days to go but this has good shot to hold at brand new ATH.

4) Silver vs. 60/40 Portfolio & Stock Market

Silver broke-out from a 4-year-long base against the Stock Market. 

This is fueling the rise in the top chart (as Silver/SPX is 60% of the top chart). 

Silver against the 60/40 Portfolio has a bit more upside before reaching the 2016 & 2020 highs. 

In the short-term, capital will continue to move away from conventional assets and into Silver, driving it towards $50. 

Ultimately, Silver breaking out of the 11-year-long base against the 60/40 Portfolio, will set the stage for Silver clearing $50 and sustaining it.

5) Silver Performance After Gold Breakout to New All-Time High

We plot Silver's performance after the Gold Breakouts to new All-Time Highs in 1972, 1978 and 2009. It's on the scale of the 2024 breakout. 

I removed 1978-1980 from the chart but not the data. 

There are two important observations from this chart. 

First, when I continue the averages and 2009 post-peak, they coalesce around $60 in 4 months. 

Second, Silver has followed the 1972 trajectory somewhat closely. 

I love how 1972 on this scale hits $49 and then forms a perfect cup and handle pattern, bottoming at $42, before blasting through $50.

6) Silver Rate of Change & Sector Peaks

This is a busy chart but the three arrows are the key points.

We plot the HUI Gold Bugs at the top, Silver, followed by the Gold/Silver ratio (yellow) and then the 50-day and 100-day rate of change in Silver.

Silver usually, but not always has a burst into a sector peak. 

2004 and 2006 were intermediate-term peaks. Silver accelerated into these peaks. 

Right now, Silver's 50-day and 100-day ROC's are nowhere close to the 2004 and 2006 peaks.

Also, the Gold/Silver ratio has not come down that much. It's at 85, but has downside support at 75.

$4000 Gold and $53 Silver equates to a ratio of 75.

Summary

Watch the close at the end of the month/quarter, as we could see confirmed breakouts to new all-time highs: Silver's Quarterly Close & Silver vs. Foreign Currencies. 

That would indicate Silver will follow in US$ terms. 

Silver is currently strong in real terms and that gives it the fuel to reach $50. 

Everything points to Silver exploding after it surpasses $50. 

However, there is rising risk of a medium to intermediate term peak FIRST. 

Will it peak at $49? $53? $55? $50?

In TheDailyGold Premium....

TDG #953 was a 14-page update.

We provided commentary on what we look for in silver producers and silver explorers/developers. There's key criteria that determines which companies will be leaders.

We also included a table of 20 silver stocks we do not own.

It shows the company's market cap, cash and roughly 100 words of our analysis.

There was one of these 20 stocks that impressed us the most. 

This weekend we will update our Top 10 Silver Company Table.

Here is part of our summary in TDG #953:  

...Gold closed at $3682 and has measured upside targets of $3750 and $3950. Could we see $50 and $4000 before the peak? It’s possible.

It’s buy, hold and trim for the bull market. Now it’s hold or trim. Because we own higher-quality companies that are not as extended, holding makes sense. But the question is stock specific. Lower-quality juniors that have rhino horn charts and are up +300% need to be trimmed. If we get a mini-blowoff to $50 and $4000, I will trim into that strength. And we could get that move in metals with the miners lagging.

The short-term positives are that Gold has more upside to its target while Silver has made small breakouts against the stock market and 60/40

Portfolio. Silver has more room in real terms. Meanwhile, gold stocks broke-out against the 60/40 several weeks ago. Nonetheless, it’s hold or trim. This is not the time to be buying.

We will continue to uncover quality juniors trading at excellent values and sporting 5x potential over the next few years. 

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Thank you for reading.

I wish you all the best in 2025 and beyond.