Silver just clocked another all-time high this morning. And if you’re anything like me, you’re probably asking the same question: Is this breakout for real, or is it just another fake-out?
To answer that, we need to shift our perspective a bit.
You always hear me preach about looking at markets like an Earthling, not just an American. Most of the time, that means treating stocks as a global asset class and acknowledging that the U.S. is only half of the world’s equity market.
Which leaves a whole lot of opportunity elsewhere.
China is ripping this year. Europe has been leading. Even Latin America is breaking out to fresh multi-year highs. Meanwhile, as well as the U.S. has done, it’s actually been a laggard.
So, yeah, the Earthling approach works.
Today, though, we’re taking that same mindset and applying it to currencies. Because if we want to know whether this Silver breakout can stick, that’s where the real answer is hiding.
Silver Back to the 2011 Highs
Here’s a long-term chart of Silver showing prices returning to those famous 2011 all-time highs:
If you weren’t around back then, the Silver mania was wild. Once that bubble burst, Silver collapsed 68%. The Silver Miners ETF (SIL) dropped more than 80%.
And now, here we are, back at that same level again. It only took 14 and a half years…
But here’s the catch: This chart shows Silver priced in U.S. Dollars. That’s the American lens.
If we really want to gauge the odds of this breakout sticking, we need to see how Silver is behaving in other currencies around the world.
That’s where the truth shows up.
All-Time Highs Everywhere Else
Here’s Silver priced in Euro — which, by the way, makes up almost 60% of the U.S. Dollar Index.
And in Euro, Silver has already taken out the 2011 highs. It’s at its highest level ever:
You’re seeing the same thing across the board: Silver is making new all-time highs in British Pounds, Japanese Yen, Australian Dollar, Canadian Dollar, even Chinese Yuan:
If Silver is already breaking out in every other major currency, it’s hard to argue it won’t eventually do the same in U.S. Dollars.
That’s how I see it.
It’s the same playbook we used with Gold. Before Gold ever broke out in USD, it was already hitting all-time highs in these other currencies.
That was the tell. And once Gold finally cleared those U.S. Dollar highs earlier this year, you saw what happened — straight-up, parabolic strength.
I think Silver is following that exact script.
Because we don’t want to approach markets with just American wallets. We want to see them the way Earthlings everywhere see them.
It’s a global marketplace.
Ignoring that isn’t just shortsighted. It’s expensive.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs