Table 1: Figures for silver supply and demand from 2012 to the present day (Source: The Silver Institute)Ī table from the Silver Institute provides figures for silver supply and demand from 2012 to the present day with year-on-year (YoY) changes for 20. Analyzing market fundamentals in this context will provide light to seemingly dislocated price movements within various charts. It therefore follows that silver as an investment vehicle is often referred to as the 'poor man's gold' and therefore it is warranted to assume performance in silver will lag performance in gold given certain market conditions.

However, the variety of industrial applications of silver outweighs those of gold quantitatively and extensively. The unique property of silver as both an industrial and a monetary metal lends an externality to the expected intrinsic value of the metal that affects price action on the broader markets. A sideways neutral consolidation for an extended period of time or a bullish run upwards after a short period of recovery consolidation after the channel exit.Ĭoupling both performance in the context of this custom pattern in the technical analysis with macroeconomic fundamentals will be an invaluable aid in determining the nature of the bull case for silver.A price run-up in a bullish fashion - a channel that can be constructed around this price action is initiated during the price drop after achievement of the last peak - that exits the constructed channel at the lower bound.Three successive peaks - each one formed lower than the last one - in the price action moving downwards.The general construction of the pattern is as follows:

The construction of the tri-peak fractal pattern is simple but extremely helpful in understanding the nature of price movements across certain market timeframes. Furthermore, the custom-built tri-peak fractal pattern is also implemented in the technical analysis for price action forecasting. A short note on the expected and current performance of the Gold-Silver Ratio (GSR) in the context of expected and current silver price actions respectively is provided with further hypotheses on the gold-silver relationship building on the introduction in discussing real yields. Examining the timeframe from the consolidation period in summer 2020 until the present day, a number of distinctly bullish and equally bearish conclusions are made and elucidated. In the technical analysis section, both bullish and bearish indicators are found to encompass the price action at present. Additionally, the correlation between the price action and real yields are qualitatively elucidated to provide clarity and introduce the relationship between gold and silver. Interesting observations are made in the supply-demand dynamics in the context of market dynamics and investment flows for a comprehensive picture. Examinations on currency supply-demand dislocations and changes are elucidated along with a brief overview of the price action in relation to real yields, which is the difference between the yield/coupon and the published MoM inflation rate. Synthesizing both fundamental silver market observations and technical price chart analyses enables effective establishment of context and purpose for constructing a forecast for silver price action and taking principles from gold market analyses aid significantly in the process.Įstablishing the state of the silver market's fundamentals and the price action technical cohesively will form the basis for further investigations.

In fact, silver, often considered the 'poor man's gold', is shown to historically lag gold in performance with great potential for outperforming the yellow metal in well-defined bull markets and an excellent asset for both building and preserving wealth. Moving the focus of the precious metals bull case on to silver does not diminish the influence of the gold market mechanics in analysis. Bet_Noire/iStock via Getty Images Introduction

Descending wedge bullish