• 306 days Will The ECB Continue To Hike Rates?
  • 306 days Forbes: Aramco Remains Largest Company In The Middle East
  • 308 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 708 days Could Crypto Overtake Traditional Investment?
  • 712 days Americans Still Quitting Jobs At Record Pace
  • 714 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 717 days Is The Dollar Too Strong?
  • 718 days Big Tech Disappoints Investors on Earnings Calls
  • 719 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 720 days China Is Quietly Trying To Distance Itself From Russia
  • 721 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 724 days Crypto Investors Won Big In 2021
  • 725 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 726 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 728 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 728 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 731 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 732 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 732 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 734 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Silver Analog

This week two investment firms came out expressing their disbelief that silver has any more upside, so investors may start getting nervous and begin asking the same question. Back on Feb 11, 2014 I wrote an article titled "Coffee to Outperform Precious Metals" and within the article I stated that Coffee looked to reach $1.75 per pound - today it reached $1.78. I had recommended buying the Coffee ETF - JO @ 23.28 and selling it at 32.99 for a 47% profit in 21 days. What I did not mention in that article was the interesting similarities between the charts of Coffee and Silver.

Often times you can get what is called an 'analog', which simply means a representation of data that is similar when compared to data of a different origin. Coffee and Silver are the two sets of data of different origin that are being compared in the chart below, from year 2001~2014, with coffee represented by the orange line and silver by the black line. The coffee price scale is on the left side of the chart and silver on the right.

What is most interesting, is that of the 7 paired bottoms (coffee=red arrow:silver=blue arrow), coffee bottomed before silver 6 times during significant moves, which coffee subsequently followed. You will no doubt notice that the most recent move in coffee has been one of the most significant advances during the last 13 years. This begs the question, is silver next?

The coffee price has almost reached its 38% Fibonacci retracement of the entire 2 year decline. For silver to achieve the same level, it would have to go to just over $30 per ounce. Although I have never been a big fan of analogs, given that so many commodities are rallying strongly, there is little reason for silver or gold to be excluded.

Silver and Coffee Analog Chart
Larger Image

 

Back to homepage

Leave a comment

Leave a comment