Silver Cycle Lows: What to Watch For

Key Takeaways

• The recent weekly cycle low for silver yielded positive results to the upside. Investors are now eyeing the upcoming daily cycle low expected in the next couple of weeks.
• Four technical signals confirm a daily cycle low: forming within the timing window, a bullish momentum cross, a swing low pattern, and a trendline break.
• Silver is only half way through the macro 8 year cycle (2022-2030). 2026 is the year of the macro half-cycle-low, a phase typically involving consolidation, volatility, and opportunities on pullbacks.
• With the gold to silver ratio at 60 [VERIFY], pullbacks in silver with a GSR above 50 are often viewed as long term opportunities to dollar cost average into the market.
• Picking up silver on pullbacks at a GSR above 50 is framed by some as a centennial trade keeping in mind future generations.

After the recent weekly cycle low for silver yielding positive results to the upside (shown on the chart below), investors are eyeing the upcoming daily cycle low expected to form in the next couple of weeks as another opportunity to add to both short and long term positions.

Signals for a daily cycle low

From a technical standpoint, the signals for a daily cycle low are:

• Forming within the timing window (rare exceptions, half cycle low inversions, and outlier examples can override these)
• A bullish momentum cross (indicators like the DSS Bressert can show this)
• Swing low pattern
• Trendline break

Looking at the daily chart below, we have the DSS Bressert momentum indicator starting to turn down, which would fall, along with the price decline, into the upcoming daily cycle low timing window, which is drawing near. This falling period would create a downward sloping resistance trendline.

Once we see a swing low pattern, and a break of the downward sloping trendline formed by the decline, along with a bullish DSS Bressert cross within the timing window, we have a confirmed daily cycle low.

The macro 8 year cycle

With silver being just half way through the macro 8 year cycle (2022-2030), 2026 is the year of the macro half-cycle-low, which overall involves consolidation, volatility and opportunities on pullbacks for the long term allocation. It is therefore fair to say that even if this daily cycle low yields to a lower low (as the macro half cycle low) later in this year (of which there is no guarantee as the half cycle low could form at a higher price level than the current daily cycle low), the current decline still presents as a significant opportunity in the larger 8 year cycle.

The gold to silver ratio

Finally with the gold to silver ratio at 60 [VERIFY], and an expectation among many analysts that this ratio could fall in the decades to come, any pullbacks this year in silver, with a gold to silver ratio above 50, are long term opportunities to dollar cost average into the market.

The chart above shows how the gold to silver ratio (light blue) behaved over the current 80 year socioeconomic cycle called the Four Turnings. The previous fourth turning, which ended in WWII, saw the GSR fall off a cliff after its completion. The GSR then spent 40 years below 50, which is the expectation held by many cycle analysts for 2030-2070, though history is not guaranteed to repeat.

Picking up silver on pullbacks at a GSR above 50 could be viewed as a centennial trade keeping in mind future generations.

A slow and steady dollar cost average approach allows you to take advantage of market pullbacks as they present themselves.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.

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