Silver Gold Ratio… Set To “Spring” Precious Metals Higher?

Metal heads have been very patient in 2018 as Gold continues to press up against breakout resistance.

One thing that has been missing is Silver strength… but yesterday’s big move by Silver may be the lift that precious metals need.

During bull markets for precious metals, silver tends to lead. Similar to small caps, it adds “beta” when bulls are in control. To measure this aspect, investors can look at the ratio of Silver to Gold.  When this ratio is heading higher, its bullish. Lower is bearish.

In the chart below, I look at the last 20 years of the Silver Gold ratio. Several advances started from a critical support line at (1). As well, the ratio has formed a bullish falling wedge pattern (2) and looks to be on the cusp of breaking out of the pattern (3).

A breakout here would “spring” silver much higher, and likely carry gold with it. Precious metals investors need to be watching this ratio here!

Silver/Gold Ratio Chart – 20 years

CLICK ON CHART TO ENLARGE

This chart was originally written for See It Markets.com. To see original article….CLICK HERE

 

 

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Comments

gmak Fri, 04/20/2018 - 01:31 Permalink

Yesterday's "big move"was probably just a blip as some junior trader was given the task of squaring a bunch of positions and hitting the reset button for more paper manipulation - and blew it through inexperience.

 

It actually snowed briefly where I am in Canada on thursday - an unusual event for the middle of April - But it does not mean that we will see the ice age anytime soon.

squid Fri, 04/20/2018 - 07:51 Permalink

when the market cracks Everything will go down together as the lot tries to raise cash for margin calls.

 

that will be the time to load up.

 

or, maybe not.

 

squid

Davilis Fri, 04/20/2018 - 08:30 Permalink

Classic counter-trend move in silver before another plunge down. Dollar shorts outweigh silver shorts, and 3-month libor whispers about the coming strength in the dollar. The hopeful holders of silver will be disappointed again.

WorkingPoor Fri, 04/20/2018 - 09:09 Permalink

I'll keep my actual metal, thanks all the same.

 

Too many of the paper folks think that all that paper will save them when SHTF. Its chief utility after that  will be ersatz toilet paper and firestarter.