Fifty Shades Of Silver

Silver is the one of the most versatile elements we know and there are definitely more than 50 shades that are used for many different purposes.  For as long as we can remember it has been used for silver coins, bars, and jewelry. The latter is in quite high demand in the upcoming festive season. Anyone who says that happiness (at least of the short term variety) cannot be bought does not know where to shop.

That said, there is also a second crucial industry in which silver is gaining in popularity, namely technology - especially green and nano technology. Furthermore, in the recent crisis silver has once again proven its value as an antibacterial agent used in the pharmaceutical industry.

But how does this translate to its performance in financial markets?

The silver market staged an impressive rally over the spring/summer, advancing by 149 percent from its March 2020 low and reaching a seven-year high in August 2020. Thereafter the silver price declined by 23 percent. Is this all sheer coincidence or is there something more behind it? In June we have already discussed the strong seasonal phase in the summer that has made its appearance this year as well. However, there are still profits to be made with this shiny metal!

Silver glitters at the turn of the year

Precious metal investors often look at silver condescendingly as gold’s poor cousin. But there is definitely more to this metal, especially the fact that a strong seasonal phase is imminent.

Consider the seasonal chart of silver below. In contrast to a standard price chart, the seasonal chart shows the average pattern of silver in the course of a calendar year. For this purpose, an average was calculated from the price patterns of the past 52 years. The horizontal axis shows the time of the year, the vertical axis depicts price information. 

Silver price in USD per troy ounce, seasonal pattern over the past 52 years

Silver typically delivers a strong seasonal return in a move that begins shortly before year-end and ends in late February 

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