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For today, here is the reprint of an interview I did Monday, April 7th, with Neils Christensen from Kitco.com.  

No hurry to buy silver or gold as economic uncertainty remains elevated 

(Kitco News) - The silver market is starting to see some signs of stabilization with prices pushing back above $30 an ounce; however, one market analyst says that it is still too soon to jump into the market as the economy balances on a precarious edge. 

Silver took a significant hit in the last few sessions as President Donald Trump’s broad global import tariffs roiled financial markets and sparked fears of trade-war-induced recession. Silver was hit particularly hard as 50% of demand comes from industrial consumption. 

Last week, silver prices dropped more than 13% following Trump’s announcement. The precious metal saw further selling on Monday, briefly dropping to 28.315 an ounce, its lowest level since early September. 

Silver has since been clawing its way higher with prices currently trading at $29.99 an ounce, down 0.3% on the day. In an interview with Kitco News, Michele Schneider, Chief Market Strategist at MarketGauge, said that while silver’s bounce may seem attractive, now is not the time to chase the market. 

Schneider said that the best thing investors and traders should do in this environment is nothing, as it is too early to define any major trend in the economy or global marketplace. 

“A lot of damage has been done and I just don’t know if or when we will see more damage,” she said. 

Schneider said that there are a lot of conflicting moves in global markets due to the economic chaos. She noted that bond yields have actually started to pick up, which is the opposite of what traders would expect as equities struggle due to elevated recession fears. 

She added that although high-yield bonds saw their worst slump since 2020, the spread between junk bonds and high-quality credit remained above critical support levels. 

Schneider said that while sentiment has calmed slightly, what makes today’s uncertain environment so unique is that there is not just one factor driving fear sentiment. She noted that the 2008 Great Financial Crisis was caused by liquidity issues in the housing sector, while the downturn in 2020 was caused by the global COVID-19 pandemic. 

While Trump’s import tariffs have sparked a global trade war, Schneider noted that conditions were already starting to deteriorate. The world has seen a significant elevation in geopolitical uncertainty due to Russia’s invasion of Ukraine and the ensuing Western economic sanctions and Israel’s war against Hamas. At the same time, unsustainable global debt levels, led by U.S. deficit spending, have kept inflation at elevated levels, and for the last three years, central banks have been diversifying away from the U.S. dollar and into gold. 

“There isn’t just one issue driving this uncertainty, which tells me that I don’t think we have seen the end of this turmoil,” she said. 

Schneider said that silver’s drop to a multi-month low Monday was an interesting move, but said that she would need a move back above $31 an ounce. 

She said that she is now neutral gold and silver, exiting her positions last week. 

While Schneider remains bullish on both gold and silver, she said that she needs to see further stabilization in the marketplace before she rebuilds her position. She noted that silver’s underperformance against gold has pushed the gold:silver ratio to a five-year high above 106 points. 

“I would need to see the gold:silver ratio go below 94 points before I would get back into silver,” she said. “In this environment, there is no hurry to get into a position.” Neils Christensen 

ETF Summary  

(Pivotal means short-term bullish above that level and bearish below)  

S&P 500 (SPY) 480 support 

Russell 2000 (IWM) 180 pivotal  

Dow (DIA) 35,000 I remember it well 

Nasdaq (QQQ) 380 has to hold 

Regional banks (KRE) 45-46 last year support level 

Semiconductors (SMH) 165 is huge to hold 

Transportation (IYT) Breaking down unless it gets back over 57 

Biotechnology (IBB) 115 resistance 

Retail (XRT) Closes April down here, spells recession

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