After yesterday’s session it turned out that silver is following a self-similar pattern. The self-similar patterns rarely play out to the letter – they are usually somewhat-alike. Yet, in the case of the white metal, we have an analogy that’s much clearer than what we normally get. That’s not just interesting – that’s very useful, as it points to a very specific near-term target.

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The previous week was quite rich in important events. Silver rallied significantly on Wednesday and mining stocks underperformed significantly on Thursday. Gold declined significantly after moving to the previous high, but without a breakdown to new 2018 lows, the situation remains tense, especially that the USD Index is fighting to break above an important support / resistance line. These signals may seem random, but if you've seen similar cases many times before, it all becomes coherent. Especially, when it's confirmed by very long-term charts of utmost importance and by little-known but remarkably effective techniques. In today's analysis, we discuss all of the above.

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The USD Index moved lower yesterday and gold reacted in the normal way. It rallied and silver followed gold’s lead. But not mining stocks. After a brief upswing, they reversed and ended the session much lower, establishing the second lowest close of 2018. Why did the miners decline, if the price of their product and source of revenue – gold – moved up in value? One could blame it on a tide that sinks all the boats – a declining general stock market, but… The S&P 500 actually moved slightly higher yesterday. What gives?

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It was moving higher early in the day, suggesting the bullish nature of the session. But only for a short while. The implications changed once it started to be obvious that silver is moving higher at a much greater pace than gold. The early outperformance seemed like a promise that something big was going to take place during the session.

It was tempting to bet on lower precious metals prices early in the day, but we were sitting on our hands impatiently waiting for the signal of greater clarity.

And we got it.

The FOMC triggered a decline in the USD and a rally in gold, silver and mining stocks. The general stock market rallied as well. The stock market and precious metals bulls were cheering for several minutes.

We knew that this was it.

As soon as silver rallied above $16.70, we decided to send the alert that we had mostly prepared in advance. In this alert we took an extra-large bet on lower precious metals prices, viewing the FOMC rally as a bluff. Less than 2 hours later, silver was already below $16.50. At the moment of writing these words, the white metal continues its decline at $16.43.

In today’s alert, we explain in detail not only what happened, but what’s likely waiting just around the corner, as yesterday’s specific action in silver and mining stocks has a lot to tell.

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