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Coming into this year, very few traders and analysts were talking about precious metals. But a few of us here at TheoTrade, myself included, found the prospects in precious metals irresistible. Now, here we are, on the cusp of a potential continuation of the bull trends in both gold and silver. 

The backdrop of this rally is what intrigues me the most. We’ve seen a notable shift in some macroeconomic capital flows, and I think there are still some excellent opportunities brewing in the sector. Check it out… 

Miners > Silver > Gold – In That Order

There are a few hallmarks of a bull market in precious metals. One is that gold initially leads in a breakout higher to new highs. We’re seeing that now. Another is that silver eventually starts outperforming gold on a relative or percentage basis. We’ve also started to see this. The final, and perhaps most exciting staple of a bull market in precious metals is the outperformance of precious metal mining stocks over both silver and gold prices.

This too, has started to manifest accordingly. If you remember, back in April, I talked about my “Back up the Truck” trades in a couple precious metal stocks, namely AngloGold Ashanti (AU) and Agnico Eagle Mines (AEM). I’m still long these names, but since then, I’ve shared a few other ideas with traders in TheoTrade’s chatroom. These include Wheaton Precious Metals (WPM). Pan American Silver (PAAS), El Dorado Gold (EGO), and Alamos Gold (AGI).

These positions are all sitting pretty, and according to my methodology, the weight of the evidence suggests that there’s still room to run to the upside. This rally in metals caught many off guard, as swathes of the trading community remain fixated on crypto. But at the end of the day, it’s important to remain asset-agnostic in markets. They’re all vehicles to be traded.

Not to mention, the gold bugs aren’t as loud as I would expect them to be. In the meantime, we’re going to continue managing risk on these precious metal mining positions, and if our plan materializes, we’ll start scaling out of longs soon, but leaving runner positions to participate in additional upside.

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