Stock Groups

Silver Sentiment Hits Worst Level in Years By StockNews

by Mike Robinson

[ad_1]

© Reuters. Silver Sentiment Hits Worst Level in Years

Silver (SLV) is down 5% this month and re-testing the $22.50/oz level. This constant selling pressure is continuing to cause a huge dent in sentiment across the sector. Bullish sentiment is at its lowest level in almost three years, and investors are leaving the sector to seek better opportunities. Let’s take a closer look below:.It’s been another rough month for the precious metals sector, with the price of silver (SLV) plunging 5% to re-test the $22.50/oz level and the miners taking another leg down, testing new 52-week lows across many indexes. This constant selling pressure is continuing to cause a huge dent in sentiment across the sector. Bullish sentiment is at its lowest level in almost three years, and investors are leaving the sector to seek better opportunities. Although extreme pessimism does not necessarily mean a bottom, it increases the likelihood of one. The key to the future is how the ratio silver/gold will change over the next weeks. Let’s take a closer look below:

(Source: Daily Sentiment Index Data, Author’s Chart)

As shown in the chart above, bullish sentiment for silver has finally flipped to a short-term buy signal as of Wednesday’s close, with the long-term moving average for bullish sentiment dipping to 20%. This is the lowest reading we’ve seen in over two years for this indicator and is a complete 180 from the sentiment picture we saw in late February, a reading of 78% bulls on the back of an attempted silver squeeze by the WSB community. Last time sentiment reached this low was in 2018’s fall. This marked the bottom for precious metals, as the Gold Miners Index GDX (NYSE):) increased more than 60% during the next eleven months. In the 11-months that followed, silver prices rose by 30%. This was the lowest level for silver in two years, excluding the March 2020 crash. Although history does not need to be repeated, with the previous signal showing a forward 12-month decrease of 6% as well as a draw-up in 12 months of 30% it was a good time to build a position.

Continue reading on StockNews

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs are stocks, indexes or futures. The prices of Forex and CFDs are not supplied by exchanges. Instead, they are determined by marketmakers. As such, the prices might not reflect market conditions and could be incorrect. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is one of most risky investment options. Please make sure you are fully aware about the costs and risks involved.



[ad_2]