Silver’s unsung strength

Silver sentiment has been quite apathetic lately, with traders showing little interest in the precious metal. This might seem surprising, considering silver's remarkable resilience despite its dramatic drop in value earlier this year. Even after suffering a significant decline following its all-time high near $116 per ounce, silver has managed to remain high compared to its historical performance and its primary driver, gold.

Its ability to weather a dangerous post-parabolic collapse and still maintain a high value is a clear sign of unsung strength. Despite these impressive gains, silver's performance hasn't been consistent. It initially lagged behind gold before making a parabolic surge near the end, culminating in a wild 149.0% increase in just 3.1 months.

However, such extreme moves often end badly, as I warned in mid-January about a week before silver's peak. I cited the infamous example from January 1980, where silver skyrocketed by 196.1% in just 2.0 months before crashing 76.9% just 2.2 months later. Yet despite this volatile history, silver has proven to be resilient, even falling 52.3% over 5.6 months to bottom above $55 in mid-July.

At this point, silver was still up 46.7% year-over-year, demonstrating its impressive recovery. While it's understandable that traders and analysts might be feeling bearish, it's important to maintain a broader perspective when evaluating silver's performance. By considering the broader context of the past half-year and even the past few years, we can see that silver has recovered remarkably well from its extreme parabolic spike.