The precious metals complex has seen strong performance this year, with gold returning 32% year-to-date and silver returning nearly 40%. Long-term bullish trends are intact for each commodity, but silver looks more actionable in the near term from a technical perspective. While silver has produced strong returns this year, it does not appear overextended when looking at the monthly chart of the iShares Silver Trust (SLV) , which shows a secular turnaround.
Long-term momentum is positive and expanding per the monthly MACD and histogram as silver pushes to its highest level since 2013. Next resistance for SLV is not until a long-term Fibonacci level near $34.00, which is a 61.
8% retracement of the downtrend from 2011 to 2020. Zooming in on the weekly chart, SLV has broken out from a six-month trading range on positive intermediate-term momentum, which supports a bullish bias over the next few months. In the short term, there are some signs of exhaustion that support a retest of the breakout point near $29.
60, which would provide a more favorable entry point. Additional support for SLV is at the 50-day (10-week) moving average near $27.60.
Silver's breakout in absolute terms has the potential to result in relative outperformance versus gold in the weeks ahead. The gold/silver ratio has seen intermediate-term momentum shift lower per the 10-week MA, and has room to support at the bottom of a long-term trading range. —Katie Stockton with Will Tamplin Access research from Fairlea.