Monday Sept 7, 2009
The Red Black bars are the yield on the ten year treasury note. The black line is the price of silver.
As one can see, there is a close correlation. It appears that silver investors are seeing higher inflation or at least the need to buy silver as rates rise, or the other way round but whatever, both are rising.
Silver appears to be breaking to the upside on the important monthly chart. While the triangle may be a bit suspect, the histogram MACD at bottom is not. It is turning up from a negative position.
Such crosses to the upside are rare occurrences and last occurred in 2003 and briefly in 2008. But turning up from such an oversold condition is significant. An assault on the old highs in the $20 area appears to be the next event.
THe importance of what is happening here cannot be understated. Hecla is a silver peroducer with over 118 years in the business. It is not making money now and just skipped the dividend on its preferred issues. Still, confidence seems high that things are getting better. NO one wanted the metals i the go go years of the 1990s. Now HL has made higher low than its multi decade low in 2001. It has gotten past some resistance at $3. Volume shown above MACD appears to be positive. WE will continue to monitor this one. This should not be construed as a recommendation to purchase HL or any other security.