01/09/2020 5:00 am EST
Focus: COMMODITIES
Editor, Gold Charts R Us
One of the most relevant macro-economic events during 2019 was gold’s breakout rise from a key multi-year resistance at $1,365, suggests Omar Ayales, chief trading strategist for Gold Charts R Us.
This move confirmed a secular bull market rise that began in December 2015. The breakout rise we are experiencing has been strong and broad — and is based as gold shares, silver and other precious metals pick up the pace.
Interestingly, silver had been a sleeper until the second half of 2019 when it started to show breakout strength. And together with a bullish outlook for resources in 2020, silver is positioned to outperform precious and resources metals.
Also consider the silver to gold ratio remains near an extreme favoring gold suggesting the ratio could start moving in favor of silver in the year ahead.
And while silver itself would be a good trade, consider buying silver shares to take full advantage of silver’s upswing. One of my favorite silver miners is Silvercorp Metals (SVM). It’s a low-cost silver producer with main operations in China.
Not only is Silvercorp Metals positioned to benefit from the renewed secular bull market in precious metals and silver, but it could benefit from easing trade tensions between China and the U.S. I consider the stock a top pick for aggressive investors; I’ll be looking to buy Silvercorp Metals on dips below $5.50.
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