Silver has dropped all the way to its 50 day moving average. So the move “too far above its SMA 50” has been corrected. At face value in a bull trending asset, this is a buying opportunity.
But there is still the matter of USD and whether it will halt at the 2nd target, 100, or continue upward to 102. Recall that our view is that 100 would bring only routine disturbances to markets like what has already happened in silver. A routine buying opportunity. If USD were to target and acheive the ultimate upside target of 102, silver could get cracked to the range of the pattern top at 34.50 to the SMA 200 (32.91 and rising).
Gold is positive today, but still locked below its breakdown point.
This is driving the Silver/Gold ratio down hard. If this is merely a routine bounce in USD to 100 or so, the correction in the metallic relationship, and the “SGR trades” could find a low soon. But again, if USD is going to 102, this indicator could get wrecked (as part of our anticipated interim summer market disturbance, at least for the commodity/resources sectors).
Think of it this way, after the 2025 degradation under Trump’s economic plan (to devalue the dollar, whether consciously or not) USD has at least earned a right to rally to 102, and Powell’s poke in the eye of Trump on rates could help instigate it. Let’s pay attention to what happens at the 100 area.
