While December was a horrible month for the broader markets, that wasn’t the case for the precious metals. As the Dow Jones and S&P 500 Indexes suffered the worst December since the Great Depression, the silver price enjoyed quite a healthy rally. The notion of rising precious metals prices during a market selloff ran counter to most analysts who forecasted falling asset values across the board.

However, that’s exactly what took place in December. I stated, since the beginning of 2018, that when the markets really started to decline the precious metals would likely disconnect and rally higher. Over the past month, the silver price jumped by 10% and gold 5%, while most of the broader indexes, base metals, and energy suffered declines.

For example, the Dow Jones Index fell 9% since December 1st, even though it has rallied from its low on Christmas Eve:

At its low on Christmas Eve, the Dow Jones Index fell a stunning 16% in a little more than three weeks. Currently, the Dow is attempting to retest its 25 Day moving average (MA) and the 24,000 resistance level which I have shown in previous charts. If we look at the graph below, we can see that the Dow finally touched the 25 Day MA today:

It will be interesting to see what the Dow does tomorrow, but at some point, the broader markets will reverse and continue to sell off.

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