It’s been a great year thus far for investors in the S&P-500 (SPY) and Nasdaq-100 (QQQ), but unfortunately, investors in the precious metals space (SLV) have been left in the dust. This is evidenced by a 20% plus return for the S&P-500 and Nasdaq and a pathetic (-) 9% return for silver. However, while the returns have been disappointing this year, they’ve created the conditions for a new bull market to emerge, with some of the lowest bullish sentiment readings we’ve seen in several years in the precious metals space.It’s been a great year thus far for investors in the S&P-500 (SPY) and Nasdaq-100 (QQQ), but unfortunately, investors in the precious metals space (SLV) have been left in the dust. This is evidenced by a 20% plus return for the S&P-500 and Nasdaq and a pathetic (-) 9% return for silver. However, while the returns have been disappointing this year, they’ve created the conditions for a new bull market to emerge, with some of the lowest bullish sentiment readings we’ve seen in several years in the precious metals space. Meanwhile, even though the S&P-500 continues to make new highs, silver is not making new lows relative to the S&P-500 and looks to be trying to bottom out currently. It is important to be optimistic. This is due to the fact silver is still making lower lows than the gold price (GLD, NYSE :)).). Let’s take a closer look below:

Source: TC2000.com

Just over two months ago, we had concerning readings for the silver/gold ratio and the silver/S&P-500 ratio, with the latter in free fall and the former looking like it would make a new 1-year low and break below its key moving average. The bulls responded to the call and held the $21.50/oz-$22.00/oz support area. This helped silver break out of its short-term downtrend. As the chart above shows, this allowed the silver/gold ratio to make a higher low relative to Q4 2020 levels, and it has also contributed to the silver/S&P-500 ratio not making a new low and continuing to hold above its 2018 lows, in the depths of that violent bear market. The outperformance of silver relative to the gold price indicates that both metals are healthy. Therefore, violent pullbacks should not be considered as new bear market starts but rather bull market corrections.

Continue reading on StockNews