Silver in Breakout Mode but Silver Shares Lag
Last we checked, Silver (NYSE:SLV) was trading at $32.53/oz. It is higher by more than 2% today after its breakout yesterday. All is good and merry right?
While Silver (NYSE:SLV) has surged in recent days and weeks, the silver stocks have lagged tremendously. In the chart below we show SLV and the SIL/SLV ratio. SIL is an ETF for large-cap silver shares. Note the strong relative performance of SIL (evidenced by the rising SIL/SLV ratio) in the months leading to the breakout in September. We see a different picture now. SIL is 10% off its December high while SLV is now 4% above its December high.
Whether it is Silver (NYSE:SLV), Gold (NYSE:GLD) or another commodity, we like to see the shares perform well prior to and into a breakout. In this case, Silver is trading at a new high but the vast majority of the shares have not followed suit.
What are our targets for Silver? What will happen to the shares? That is for premium subscribers only. So consider a free 14-day trial to our premium service!
Jordan Roy-Byrne, CMT