silver loses its mettle

Silver Loses Its Mettle – Part 2 (Technicals)

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RE: SILVER LOSES ITS METTLE 

Last week I talked about unrealistic expectations for the price of silver (see Silver Loses Its Mettle). My comments were centered on two specific factors: 1) silver’s primary role as an industrial commodity and 2) the fallacy of the gold-to-silver ratio.

Both of these items have their root in fundamentals, or lack of them.

In addition, I pointed out the fact that the price of silver has declined significantly in every single recession of the past fifty years.

Not surprisingly, the technical side appears to reinforce the lack of fundamental support for higher silver prices.

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Silver Loses Its Mettle

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SILVER LOSES ITS METTLE

Actually, it is silver investors who might be losing their mettle. Coping well in the face of a fourteen percent decline in the vaunted white metal must be very difficult.

The size of that decline happens to be right in line with the major stock market indices, all of which (Dow, S&P, Nasdaq) lost similar percentage amounts this past week. No better, no worse for silver; but it is ironic.

We have been told over and over that silver is a hedge against that type of stock market action.  Also, we’ve been told that silver would be more explosive that its well-respected brother, gold. It was – sort of. The correct word is implosive.  

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