Everyone is obsessed with the artificial intelligence (AI) trade, and for good reason.
AI stocks have been the shining stars of this cycle. But many of the leading names have come under pressure lately.
Nvidia (NVDA)—the world’s most important AI stock—has fallen roughly 13% since the beginning of November.
Palantir Technologies (PLTR)—another AI bellwether—has also sold off. It’s down around 17% over the same stretch. It too is hanging out below its 50-day moving average.
One asset class has been climbing in the face of all this volatility: metals.
Take a look at silver. It’s recently broken out of a base that dates back to 2011:
Source: StockCharts
This is incredibly bullish. After all, the bigger the base, the higher a stock tends to rise after breaking out.
There’s good reason to think silver outperforms the market for months, if not years, to come.
The chart below compares the performance of the iShares Silver Trust (SLV) with the Invesco QQQ Trust (QQQ).
When this line is rising, it means silver is outperforming the QQQs. We can see that this ratio just broke out to multi-year highs. That’s incredibly bullish for silver going forward.
Source: StockCharts
As you can imagine, silver miners have also been on a tear.
Pan America Silver Corp. (PAAS)—one of my favorite miners in the space—just broke out of a base that dates back to 2008:
Source: StockCharts
Copper has also been on a roll. This morning, copper futures hit multi-decade highs.
Naturally, copper miners are benefitting from this. Take a look at the Global X Copper Miners ETF (COPX). It’s rallied 54% over the past six months. And it just broke out of a multi-week bull flag.
Source: StockCharts
In my RiskHedge Live trading room, we have a ton of commodity exposure, and I continue to be very bullish on this space.
See how to join us in RiskHedge Live and get my up-to-the-minute trades, as they unfold, by going here.
Justin Spittler
Chief Trader, RiskHedge
