As you can see silver (and gold) correlate very closely with the C$. The attendant indicators are telling us the C$ is right at their lower boundary extremes, signaling a reverse soon may be imminent. A reversal to the upside for the C$ means a rising silver price in US dollars. So, US$ owners will get a 2-fold hit.

This week the C$ touched a new swing low of 84.79 by going below that 85.01 in April at which time you can see the huge white candle signaling a reversal to the upside. It's anyone's guess if the C$ will continue down to test its earlier swing low of about 83.5 in November of 2005. I think it could except for the severe oversold levels that the indicators have achieved by being at the bottoms of the boundaries. Should the C$ have a good day tomorrow it should be enough to end the week with a decisive MACD bar turn-up along with a clear crossover for the SlowSTO. An RSI of 32.06 is at a level not seen in five years!

Now then, here's this: the silver price at C$14.50 is closer to taking out its May high of about C$16.50 than the US$ @ $12.40 silver is in taking out its May silver close of about US$15.00. The C$ is 13.8% below, and the US$ is 21% below their respective silver highs. A significant difference of over 7%. Whoopee-do. What does this mean? I don't know. Can it be telling us that the C$ precious metals equities will outperform vis-a-vis alternative currency miners? It could certainly indicate that the C$ price of silver should be taken out before the US$ price of silver achieves a new high. Canadian miners' earnings should shine. Foreign investors with earnings in a commensurately higher C$ should get more of their own currency (US's) when 'repatriated' earnings are converted back into their host currencies.

It could also mean none of the above. You'll see in May 2005 when the C$ began moving up, silver's advance lagged considerably until about mid-August.

Oppositely, a stronger C$ means a weaker US$. Duh. Might that mean a rapid escalation in the US$ price of silver ahead of a C$ price of silver? Again, don't know.

The C$ is one of those "natural resources currencies" so that other commodities could probably be substituted here for silver with a similar picture. In fact, when you replace silver with the $CCI commodity index it's very near identical. A reversal in the $CCI is not as bullish. Free Stockcharts limits me to the number of peripheral add-ons I can use, so for most of you to be able to read the chart, I have limitations.

In summation, I started out this exercise to find a clear answer, but here I've left you without one. The value to this exercise is to give us another indicator when the next bull market cycle in precious metals is to begin.

It'll begin when the C$ reverses, and that could be as soon as next week.

- - CV