Incoming 40% correction on Gold / Silver ratio

The above 12 day chart a 40% increase on the Gold / Silver ratio since early 2021 within a rising channel is shown. A number of reasons now exist to suggest a strong reversal in that trend with an equal 40% correction. They include:

1) Hidden bearish divergence. This occurs as oscillators print higher highs with lower lows in price action. (Black arrows).

2) A rising channel breakout. The breakout in the Gold / Silver ratio is clear to see with a flag extension measuring a further 40% correction. The correction area is by no means the end of the correction. Look left.

3) It is not the first time a hidden bearish divergence has printed on the Gold / Silver ratio. The last flag breakout occurred in October 2010. Price action on Gold saw a 40% correction in the months that followed. Ask yourself, is the current Gold euphoria indicative of a new bull market or the contrarian call for the top?

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Gold has now dropped $120 from the 2450 peak at the same point the ratio breakdown confirmed. Expect corrections in Gold price action to continue in the weeks ahead as long as the ratio continues to breakdown.