Will the Greenland threat push Silver to $120?

This could actually happen. Silver could temporarily rally based on all this. I’ll get back to this shortly. Meanwhile, let’s take a look at the context. 

The Greenland saga continues, and it also continues to be remarkably similar to what happened last year regarding the tariff war with China. I wrote about it (and about Trump’s psychology and no-strategy strategy in my yesterday’s analysis).

This title (from Yahoo!Finance) pretty much sums it up.

That’s the same script. The stock market is down today, but not YET plunging. The USD Index declined heavily, but while it broke below its rising support line, it remains above its April low.

The prolonged consolidation continues.

The decline is visible on a short-term basis, but not so much from the medium-term point of view, which is remarkable when you compare it to how damaging the threat of a military action against Europe “should be” for the U.S. currency.

Gold soared once again, but – as I wrote yesterday – once we get a sudden resolution regarding Greenland – likely based on some other accommodation that Trump can frame as his victory – it’s likely to decline just as fast as the risk premium declines.

Silver’s upside is real

Silver moved higher once again, and it could be on its way to $120. My yesterday’s comments remain intact:

Can it happen? Yes, it can, and silver can rally even higher – to $120 based on how it soared after previously breaking above the important highs.

Silver’s major, medium-term tops formed in near perfect tune with the same pattern – it was about applying the Fibonacci extension to the 2002 top and the most recent major top. Precisely, the next move was either 1.618 or – 2.618 times greater than the previous move (both starting from the 2002 top). That’s what you can see on the chart above, and that’s what’s pointing to the $120 level.

While I’m at it, I’d like to take this opportunity to reply to a question from one of our Diamond subscribers:

PR would you please tell me with the new push to highs as in both silver and gold do you have any changes with a long-term forecast particularly on Silver and what your thoughts are as to time frames with regarding a correction and then a move back up to New highs?  Thank you

Everything that’s happening right now does not change my very bullish thesis on silver. I think that silver’s huge top could be as high as $300 - $500. The $120 target is just an interim one based on the current technical setup and given the good possibility of finally seeing huge declines on the stock market (and a rally in the USD Index). 

Timing the move

However, as you know, based on the Silver Rising book, there are 100 catalysts driving silver higher. It will not be the price itself that likely stops silver from rallying further, but rather most of the catalysts playing out or being cancelled in one way or another. By being aware of them, we’re able to monitor the market and know more or less when the market is close to forming its major top. I think we’re 1-4 years from that final top.

If silver soars to $500, but most catalysts are still likely to activate, adding to volume and no counter-measures are taken against the initial catalysts, then silver could soar higher – even to $1000 or higher.

There’s one more way in which those catalysts are important – if they continue to activate and price temporarily refuses to react to them, it indicates that we’re seeing a local top or one is about to form. Again, knowing the catalysts is crucial for this kind of analysis.

Regarding time frames – given the current momentum, we could see silver at $120 as early as in February or March. However, it’ a big maybe – if the USD Index rallies and gold declines as the above-discussed risk premium diminishes, silver could decline as well. However, silver has its own unique situation – the physical tightness could attract buyers that will once again push it higher. That’s why I’m not exiting the long positions in silver right now.

How big can the correction be? I’d say that silver could decline to $50, and building a strong support there over several months – perhaps bottoming in the summer. But that’s a big guesstimate on my part – not a clear time target – I don’t have one at this point.

Then silver could take another 3-9 months to rally back to the current levels or the $100+ levels.

Also, not all anti-dollar assets are rallying today. The biggest loser? The cryptocurrency sector.

We’ve been shorting it since the $104k level (actually shorting above it), and it looks like the flag pattern is about to be complete with the downside target well below bitcoin’s 2025 lows.

In light of today’s decline in the USD, bitcoin should be soaring. The fact that it’s declining is a clear sign of weakness. It’s pretty much not saying but screaming that it wants to move lower.

All in all, silver might be on its way to soar to $120 in the following weeks, however, if we get a turnaround in the Greenland situation and the situation de-escalates, the entire precious metals sector, including silver could decline in the short and medium term.