We were asked by a friend in the media for one prediction for 2014 and a brief explanation of our position.
Silver rallies 50% as inflation expectations rise and worldwide growth reaccelerates.
We have used the Nasdaq bust in 2000 as a comparative guide for silver and the precious metals complex over the past three years. From a momentum and performance point-of-view, silver found a cycle low this past summer. From a relative performance perspective, silver has been outperforming gold since late July. This impressions us to believe the low inflation backdrop is shifting discretely beneath the markets as gold and silver have tested the panic lows from early summer and look poised for reversal into 2014.
As obituaries are now being freshly penned for the precious metals sector, we pause at the timing - considering that trade had died more than two years before. On the contrary, we believe a new birth announcement is in order.