Yesterday’s price action in the precious metals market was very specific. Gold declined very little, silver declined much more, and mining stocks moved a bit higher. When we see a mirror image of such action (gold pauses, silver rallies and miners decline a bit), it’s usually a sign of a top.
Why has silver underperformed recently? As always, there is no clear explanation behind any price move (other than because someone pushed the “sell” button), but it seems to us that it can be in a large part attributed to the sharp decline in the general stock market.
If we are just seeing the beginning of another huge decline, then we are still quite likely to see a sharp rally in silver, just before the big drop.
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