Is this the moment precious metals bulls have been waiting for? A huge breakout from a long term downtrend is potentially very close.
The ironic thing is that it happens at a time when literally nobody is looking into the precious metals market anymore. It feels like a handful of truly hardcore gold bugs are the only ones left with an interest in the metal space. Now that is THE most interesting characteristic of a promising bull market.
Readers know that we rely on charts. In this case, the chart really says it all.
The general rule is that a breakout is triggered on a low degree timeframe. In the case of silver, the daily chart signaled a big breakout on Wednesday May 13th. The silver price broke through a downtrend, indicated with the red line, on high volume. The breakout took place at the 3d retest of the red trendline.
That is a textbook example of a breakout.
The weekly chart shows that silver is about to retest the longer term trendline also for the third time. We can only be sure of a secular breakout once the trendline on the weekly is broken. We will probably find out in the coming 2 to 4 weeks.
The key price to watch is $19. If silver breaks through that point, and remains above it for at least 2 to 3 weeks, then chances are extremely high that the downtrend will be broken.
Gold is lagging somehow behind. That is not very surprising, as silver has a track record of leading the whole precious metals sector, both higher and lower. The key price point to watch for a breakout in gold is $1250.