SIVR

Gold has been suppressed by a rally in 10-year Treasury yields.The dollar is still in the driver's seat for gold, however.I expect the dollar to weaken once the next U.S. stimulus is announced.A falling dollar will strengthen gold's price, pushing it above $2,100.

The Fed will continue to pursue inflationary stimulus regardless of the election outcome.Insatiable demand for solar energy and various electronic applications will continue to use up more silver.A mining supply deficit in silver will contribute to market tightness and possible bottlenecks that render refined silver products difficult to obtain by investors and industrial users alike.

In the long run, the constant rise in liquidity injected by central banks to assist the restrictive economies will support assets with limited supply, such as gold and silver.However, the rise in uncertainty over the US elections and new rounds of lockdowns to fight the pandemic will increase demand for safe assets such as the USD.A stronger USD may weigh on both gold and silver in the short run, which have already started to show some signs of fatigue.

Silver in percentage terms will outperform gold in this precious metal bull market.Investors are in an acquisitive mood as the demand for physical silver takes off.Demand via the silver-backed exchange-traded products (ETPs) has just about tripled in the first nine months of this year.Avoid the day to day and even the week to week oscillations in the silver market as this is no more than a distraction from the emerging bull market in the precious metals space.

SIVR has rebounded decently since late September, which has been triggered by a renewed fall in the dollar, pushing the broad-based precious metals space higher.Given the positive change in the macro backdrop for silver, we are inclined to change our near-term view on SIVR from cautious to very positive.Light spec positioning, bright ETF investor sentiment, and a relatively cheap silver price relative to gold make SIVR vulnerable to hefty upward pressure in the near term.In this regard, we set our 1-month bullish target at $30 per share for SIVR.

Silver dramatically outpaced other assets in Q3.Silver stock investors have been loyal, holding even through price declines.Any near-term weakness is likely short-lived.  Buy on weakness and hold through renewed strength.

There is unprecedented pressure on the dollar coming with more fiscal stimulus set to come out of Washington which should benefit silver and the SLV specifically.Inflation is likely to come around, and the Fed is targeting such inflation at 2% which is a tailwind for the SLV.Silver will see continued demand as a precious metal and favorable pressures from a reopening economy and the SLV ETF will track higher on this demand.Physical assets, other ETFs, and individual silver companies can be considered, but we think it is best to stick with the SLV for most traders.

The dollar index heads lower- Q4 can be a rough period for precious metals. A rough September, but another bullish quarter. The first October surprise and the stimulus saga. Three reasons for higher gold and silver prices in 2021. Buying the dip using GDXJ and SILJ.