Here’s Why Silver Should Keep Moving Higher in 2021 | The Mesh Report

Here’s Why Silver Should Keep Moving Higher in 2021

The Gold Enthusiast April 28, 2021 Comments Off on Here’s Why Silver Should Keep Moving Higher in 2021

While the major market averages continue to make new highs, the precious metals market has seen a sluggish start to the year. Fortunately, the metals have started off Q2 much better, but silver is still underperforming the S&P-500 by more than 1000 basis points year-to-date. The good news is that the recent outperformance has led to many investors giving up on the trade, with sentiment mostly reset from its massive spike in February. This has put the conditions in place for a strong move higher if silver can get past resistance, and one of the best ways to play the sector is junior silver producer GoGold Resources (GLGDF).

Chart, line chart, histogram Description automatically generated

(Source: Daily Sentiment Index Data, Author’s Chart)

As shown in the above chart, sentiment for silver has shifted dramatically from early February, with sentiment readings falling from 90% bulls to 30% bulls. As we can see, this has led to a significant improvement in silver’s long-term moving average for sentiment, given that this moving average has plunged from a reading of 79% bulls to 45% bulls. While this reading is not yet on a buy signal and would require further weakness to drop into the buy zone, it is a massive improvement, especially considering that silver made a new multi-year high last week.

A screenshot of a computer Description automatically generated with medium confidence

(Source: TC2000.com)

Generally, markets that have made new multi-year highs rarely see sentiment slip below 50% bulls, let alone the recent readings of 30% bulls and the sharp drop in the sentiment moving average. Given this improvement in this sentiment moving average and the fact that we should begin to roll off the high readings from February next week, the reading for this indicator has shifted from cautious to neutral recently.

Continue Reading At The Gold Enthusiast

Comments are closed.