Silver has had one hell of a pullback. Eight straight weeks of red candles will do that to sentiment. But the question everyone's asking me right now is simple: is the bottom in?

I can't answer that with a straight "yes" myself. I don't hold an Australian financial services licence, so I'm not allowed to call a market low. But I know someone who can, and who just has.

David Bird, founder of Mastering the Markets and a certified financial technician operating under an AFS licence, came out last week identifying the low in silver. I'm always happy to highlight his quality analysis when I see it.

The Sentiment and Gold to Dow Signal

David's starting point was sentiment, and it had turned ugly. He was getting messages across his socials asking if the move was over and whether people should be getting out. That's exactly the kind of capitulation talk you'd expect after eight weeks of straight selling in gold. By the time most people start panicking, David's usually asking whether the selling is getting exhausted.

The first technical piece of his puzzle was the gold-to-Dow ratio, essentially how many ounces of gold it takes to buy the Dow Jones Industrial Average. This matters because it strips fiat currency out of the equation entirely and prices US stocks in real money.

When David called the top back on 29 January, he said the ideal target for the correction was the 50% Fibonacci retracement. That's exactly where price landed, arriving alongside bullish divergence and a heavily oversold market. That's the first major piece of confluence.

The Silver Retracement and the Miners' Divergence

Next, David zoomed out to silver on the three-month timeframe. Silver had pulled back into the 38.2% Fibonacci retracement after its breakout, a healthy retracement into what he calls the zag zone, the area where price is likely to turn and continue its prior trend.

Then he zoomed into the daily chart and found something more interesting. The silver miners weren't confirming the weakness. Silver made a fresh low, but the miners actually put in a double bottom. That's classic bullish divergence, and it's a concept David teaches in his technical analysis course, Tech 101: the indices must confirm.

Read that again slowly. Silver miners are a leverage play on the metal itself. When silver drops, you'd expect the miners to drop even harder. Instead, they held their ground and started forming a higher low. The big leveraged plays showing relative strength while the underlying makes a fresh low is often a sign that buyers are quietly stepping in before the metal itself turns.

Here's what makes this even more compelling. David saw this exact same clue back in 2022, when he called the gold bottom around $1,600 USD. Gold made a fresh low, but Northern Star, one of Australia's largest gold miners, held a higher low instead. That divergence was one of several pieces of confluence that gave him the confidence to go long, and it played out.

What This Means for My Own Positioning

Now, I've seen a lot of insane analysis floating around precious metals over the past month, everything from crazy downside calls of $30 USD silver to equally crazy upside calls of $1,000 USD overnight. This is exactly why I follow people with a level head and a track record of being right more often than not. David Bird ticks that box for me.

Here's what I'm doing with my own money. We've been increasing our positions here at Liberty Bullion, mainly in silver and platinum, on the view that the low is in or close enough. And honestly, even if I'm wrong and it goes lower from here, I'll just buy more.

Given that I expect $300 USD an ounce within the next three years, whether you buy at 65 or 56 doesn't matter much in the scheme of things. What matters is that you're actually in the market. If you're waiting for the "perfect" $50 USD entry and it never comes, you might find yourself with a very stinky finger from trying to pick the exact bottom while the price runs away to $300.

Combine David's technical picture with the Fed's shift in tone on inflation last week and the fastest increase in US M2 money supply in years, and I remain incredibly bullish on precious metals from here.

What a time to be alive.
Sam from Liberty Bullion