Market Alert - Precious Metals

The action in the precious metals markets over the last couple of days is suggesting a turn may be just around the corner. On Sunday night, the silver market opened and silver was clocked for -10% in about 5 minutes. Usually when this happens (silver is a small market and can be pushed around by aggressive pit traders) the weakness follows through into the next day's session and the rout typically spreads to the silver miners and across the precious metals sector in general. 

This time however, silver retraced the entire decline and closed +3% on the day and the mining stocks followed suit with across the board gains (Monday 20th May). If this rally sticks over the next few days it could signal that the painful 2+ year correction in the sector is finally at an end. The next leg in the bull market in precious metals could be about to kick off.

The 2-year bear market in silver could be over, which means the next leg of the bull market is about to start and a test of the $50 area is likely.

The 2-year bear market in precious metals is close to ending, which means a challenge of the 2011 all time highs could lie ahead later this year or in 2014.