As the Fed tapers asset purchases, silver fell 16% in Quarter 3. Inflation is expected to decrease in the next few months, as supply chain problems are resolved. Taylor Dart discusses why silver could see strong Q4 as supply chain issues are resolved. However, precious metal bulls who hoped for stronger silver in the second half haven’t been pleased. Silver (SLV) fell by more than 16% Q3, and is now deeper in negative territory. This horrid Q3 performance followed a sharp reversal and 6% drop in June, and it’s now up to the bulls to play strong defense as we Q4. Investors have the good news that silver seasonality remains strong in Q4. Silver often finds a low late Q3/early Q4 before rallying to year-end. The other good news is that silver is the most hated it’s been in years, and when the scales are tipped too far in one direction for pessimism, we typically see snapback rallies. Let’s take a closer look below:

Source: EquityClock.com

Let’s start by looking at seasonality. We see silver following its usual seasonality characteristics quite well to begin the year. It saw a near parabolic rally out of the gate on January. But, unlike March, where it typically peaked in February. The metal then reached its peak in Q2, as is the norm, and continued to decline through its weakest season: May-July. Unfortunately, Q3 saw the softness of June continue. This has caught many investors by surprise. Silver is only a week from the H2 low period, which occurs typically in October’s 2nd week. This low is the silver’s silver silver silver. The bulls will have strong relief rallies ahead if December 2021 looks anything like December 2020. Silver was up 15% in December last year and 16% in Q4. Obviously, there’s no guarantee that silver follows its seasonality traits. However, the seasonal low expected is arriving simultaneously with a sentiment buy signal. Thus, more weight can be placed on a possible bottom.

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