Barry Dawes of Martin Place Securities, a renowned market analyst, believes that silver is poised to outperform gold in the current market landscape. This optimistic view is based on his detailed analysis of current market trends and key indicators.
Dawes points to the recent surge in gold prices, currently in a wave 3 that could propel the price to US$3000. While gold has seen a significant rally, silver has lagged behind, but he believes it’s now ready to catch up. The breakthrough of the US$32 price point for silver is a crucial sign, suggesting a potential quick test of the previous high of US$50.
Further bolstering Dawes’ argument is the performance of gold stocks, which are showing signs of a breakout. The XAU index, a major North American gold stock index, is about to break through long-term resistance at 165, a sign of a potential surge. This indicates a strong shift in market sentiment towards gold stocks.
Interestingly, Dawes highlights a correlation between silver and gold stocks, rather than silver following gold directly. This explains why smaller gold stocks have underperformed compared to large-cap gold indices and the gold price itself. He believes that the surge in gold stocks will now benefit small and micro-cap gold stocks, leading to significant rises in their share prices.
Dawes’ analysis extends beyond precious metals. He predicts a surge in the prices of all commodities, including oil, coal, copper, lithium, grains, and fertilizers, with futures prices already nearing US$2,700. He expects gold to outperform stocks but doesn’t foresee a market crash.
Dawes concludes by highlighting the strength of the ASX Gold Index, which has broken through the 8700 level and is heading towards 10,000. This reinforces his bullish outlook on the gold sector and its potential to drive further growth in the coming months. Overall, Dawes’ analysis presents a compelling case for silver’s potential to outperform gold, driven by a combination of market sentiment, strong performance of gold stocks, and a broader upward trend in commodity prices. Investors looking to capitalize on this potential surge in silver should pay close attention to the market signals and Dawes’ insights.
