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    It’s not just gold that glitters: Knock, knock! Silver is spiking too

    Synopsis

    What’s intriguing for the silver chart is the “rare of rarest price pattern.”

    Kunal Bothra

    Market Expert, ET NOW

    Kunal Bothra has over 10 years of experience in financial markets. With expertise in understanding markets, and competency in technical, behavioural, and statistical analysis, Bothra is one of India's finest technical analysts. Known to be an excellent stock picker, he was earlier with the Edelweiss Group and LKP Securities.

    Commodity Summary

    MCX
    The current craze and euphoria around gold has been unprecedented. Indians suddenly seem to emerging as the best investors in gold, and the yellow metal is going through the roof.

    But have you also noticed that one of its major competitors, or should I say partner, has started to resurrect itself from deep negativity, and how! That’s silver for you.

    From the March low, here is the performance scorecard of gold v/s silver:

    Gold silver snip 1ET CONTRIBUTORS
    Fig 1: Performance scorecard of gold v/s silver from March 2020 lows

    This table clearly tells us that silver has managed to outperform gold from the Covid-19 correction. The white metal has managed to close at fresh quarterly high after almost four years, which by itself is a major feat. In fact, more than a feat, it’s a statement.

    What’s all the more intriguing for the silver chart is the “rare of rarest price pattern.”

    Silver has just formed a Double Flag Pattern. Flag patterns are generally supposed to be first stage of a bullish setup. If and when they form perfectly, it could be first signal of a new price trends. Now if one flag can result one powerful new trend, imagine what could a Double Flag pattern be capable of.

    Gold silver snip 2ET CONTRIBUTORS

    Fig 2: Silver $ price charts. Daily time frame charts with formation of rare Double Flag patterns.

    Conclusion: There is currently a rush to buy gold, and literally every Tom, Dick and Harry on the street is advising investors to buy gold. But hey! Silver seems to be the asset class which is witnessing a major pickup. There is a Long way for silver to catch up to the 2011 high of $49-50. But the charts have primed the asset class in a way in which makes it an extremely strong candidate to watch from here on.
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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