Saturday, October 4, 2014

Precious Metals Market - Situation Is Very Interesting

First of all - I cannot find any optimism on precious metals market. Everybody is busy with guessing to what levels gold or silver are destined to fall. But I know one thing - when everybody is pessimistic about any asset class  the bottom is near or we are just at it.  The same is with gold and silver.
Anyway, this time the situation in PM market is a little bit different. But before more details are provided, please, look at the current situation at this market:

It looks as the whole sector is standing on the edge of a major disaster with silver breaking down below its strong suport.
Maybe, but not so fast. Previously, in 2011 - 2013, when a bear leg in PM market started, the first assets to breake down were stocks of Juniors and Producers. Gold and silver followed them one year later.
Today, the leading factor is silver - it broke down in September. Gold and Producers are at their supports while Juniors are behaving pretty well (see the chart at the bottom of this post).
I do not have the slightest idea where all that mess will end but definitely Juniors are being strongly accumulated. And due to the fact that the only players buying Juniors are proffesionals (with very deep pockets), this occurence confirms my belief that we are near the bottom in the PM sector.

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