In an October 8, 2024, Barchart article on the precious metals sector in Q3 and beyond, I wrote, “The trend is always your best friend in markets, and it remains higher in gold and silver going into the final months of 2024.” COMEX December silver futures were at the $31.93 per ounce level on October 7 and were slightly lower in late November. However, the bullish trend since March 2020 remains firmly intact and it may not be long before silver conquers the recent high at just over $35 and moves to new multi-year highs on a path to challenge the 2011 $49.82 high and the 1980 $50.36 record high.
Silver’s path remains bullish in late 2024
COMEX silver futures traded to an $11.64 per ounce pandemic-inspired low in March 2020.
The monthly chart highlights that silver’s price more than tripled at the latest October 2024 $35.07 peak. Silver has made higher lows and higher highs since March 2020.
Levels to watch over the coming weeks and months
Silver futures have corrected in post-election trading, falling toward the $30 per ounce level.
The weekly continuous contract COMEX futures chart illustrates silver’s bullish trend. Technical support is at the August 2024 $26.505 low, with technical resistance at the October 2024 $35.07 high.
The quarterly chart dating back to the late 1960s shows that the next technical upside target is the late 2012 $35.445 high. Above there, the 2011 and 1980 highs are the critical technical milestones.
Gold says higher silver is on the horizon
COMEX gold futures prices rose to over $2,800 per ounce in October 2024. While the price has corrected in post-election trading, gold remains more than ten times higher than the 1999 low as the two-and-one-half decade gold rally remains firmly intact.
The quarterly chart shows gold’s ascent over the past years and the pattern of higher lows and higher high. Central banks and governments have remained the leading gold buyers over the past few years, adding to reserves and validating gold’s significant role in the global financial system. Gold is the world’s oldest means of exchange, and silver has been right alongside gold throughout history. While governments hold gold as an integral part of their foreign exchange reserves, they abandoned owning silver because of the metal’s penchant for extreme price volatility over the past decades. However, gold and silver’s correlation dates back thousands of years, and gold’s ascent remains a bullish factor for silver’s price. Gold and silver are hard currencies in a world where government fiat currencies are losing value.
Silver mining shares have rallied- SIL and SILJ are diversified silver mining ETFs
Silver’s latest rally took the metal 30.4% higher, from $26.885 in August 2024 to $35.07 in October 2024. Silver mining shares tend to outperform silver futures on the upside as mining shares provide leverage. The G Silver Miners ETF (SIL) owns a diversified portfolio of the leading senior silver mining companies.
The chart shows the SIL ETF outperformed silver futures during the August through October 2024 rally, moving 50.9% higher from $28.02 to $42.29 per share.
The ETFMG Prime Junior Silver Miners ETF (SILJ) also outperformed silver futures over the past months. The chart highlights SILJ’s 49.3% rally from $10.17 to $15.18 per share over the period.
SLV is the most liquid silver ETF product holding physical silver bullion
While the most direct route for silver exposure is the physical metal, the iShares Silver Trust (SLV) owns physical silver bullion. It allows market participants to own a silver proxy in standard portfolios.
The chart shows that SLV rose 31.1% from $24.25 to $31.80 per share from the August low to the October high. The highly liquid ETF with over $14.77 billion in assets under management invested in silver did an excellent job tracking the nearby COMEX silver futures price.
In post-election trading, the silver price has declined, with the December futures below $31.50, SLV at $28.46, SIL at $36.14, and SILJ at $12.10 per share. While the election provides more certainty for U.S. domestic and foreign policies over the coming years, the high deficit, inflation, and geopolitical tensions remain a clear and present danger. Moreover, the dollar’s role as the world’s reserve currency has declined over the past years, which is a bullish factor for gold and silver, the world’s oldest hard currencies. Buying gold and silver on price weakness since the turn of this century has been optimal, and I expect that trend to continue. Silver settled at $5.413 per ounce at the end of 1999. Silver’s path of least resistance remains higher at over $31 per ounce in November 2024, and we could see a challenge of the 2011 and 1980 highs over the coming months and years.
