Loading ...Silver’s new bull market
Silver officially entered a new bull market this week, decisively crossing the necessary +20% threshold. Speculators and investors alike are returning as awareness spreads of how radically undervalued silver is compared to prevailing gold prices. When silver awakens to a new bull market after a long bearish slumber, massive gains are usually unleashed. Silver’s tiny advance so far is just the tip of the iceberg.
This Tuesday, silver surged 4.4% higher on strong Asian bidding in parallel with gold. The catalyst was fascinating, China finally launching its long-awaited yuan-denominated gold benchmark. China is the world’s largest gold producer, importer, and consumer, a commanding position that should grant it much bigger say in the gold industry. The new yuan gold price will ultimately challenge London’s century-old hegemony.
The prospects of more Chinese with their deep cultural affinity for precious metals having easier price discovery and access catapulted silver into bull-market territory. Its previous best close of 2016 about a week earlier was only 18.5% above its 6.4-year secular low in mid-December leading into the Fed’s first rate hike in 9.5 years. Tuesday’s big Chinese silver rally boosted this young upleg’s gains to 23.7%.
That propelled silver decisively across that official new-bull-market metric of +20%. Interestingly, silver was even faring better than gold. While gold entered new-bull-market territory in early March, at best as of the middle of March it was only up 21.0% from its own mid-December 6.1-year secular low. While silver got off to its usual slow start, it has already surpassed gold’s gains. This outperformance will mount.