Gold is Breaking Out But What About Silver?

Gold takes center stage when it comes to precious metals and for good reason. It's been considered and used as a store of value for thousands of years. It's also trading near all-time highs and has technically just recently broken out of a pennant.

But what about silver?

Silver is considered a store of value (silver coins like the American Silver Eagle) but it also has industrial use because of its strength, malleability, ductility, and ability to conduct heat and electricity.

Some of the more common uses are in fabrication, including electrical applications such as conductors, switches, contacts, and fuses. This makes it a good fit for the production of solar panels and for various applications in the automotive industry. 

But what I'm more interested in is the price action. And right now silver is looking like it could make a move higher.

Even more interesting is what happened in the last bull market in gold and silver. Silver actually outperformed and by a large margin.

Another chart worth looking at is the gold to silver ratio. Look where it was when silver topped out in 2011.

Keep in mind, that silver can be volatile and frustrating as there are a lot of "head fakes".  However, with gold trending higher I like the odds that silver could play some catch-up.

As long as silver is trading above its March low I like the odds of it at least testing the highs from last year near $30.

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Nothing in this blog post should be considered investment advice and is provided for educational and entertainment purposes only. The commentary and information represent the opinion of the author and are not recommendations to buy or sell any security or investment product. The author may or may not hold positions in the securities and investments mentioned. Full disclaimer here.