Silver exchange traded funds gained nearly 2% on Monday, raising hopes that the metals ETFs are forming a short-term foundation after last month’s sell-off.

The $11.2 billion iShares Silver Trust (NYSEArca: SLV) was up 1.7% at last check.

The silver ETF is “outperforming today, reasserting the relative uptrend of the past three weeks against the S&P 500,” said Tarquin Coe, technical analyst at Investors Intelligence, in a note to subscribers Monday.

“The precious metal ETF is building a potential inverse head-and-shoulders bottom, a pattern, which if confirmed, yields a target to $43.40 [a share],” he wrote. “That level works well with $42.09, a Fibonacci 61.8% retracement of the late April and early May sell-off.”

The iShares Silver Trust was trading around $36 a share in afternoon dealings Monday. It entered the session with a year-to-date gain of about 17%.

“This fund has been providing leadership over recent months, so its recent strength adds confidence to the bullish motion for global equities to soon recover,” said Coe, the technical analyst.

Full disclosure: Tom Lydon’s clients own SLV.

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