Hello, Traders Investors And Community, welcome to this analysis about the gold-silver ratio, its current price-action, and what we can expect the next time. In my observation, I found some significantly sings in the chart which will affect the ratio fundamentally farther the next days and weeks. The goldsilver ratio is an important ratio to track the number of silver ounces compared to one ounce gold, therefore, it is providing important information about the value between silver and gold. I made already the analysis of gold and silver, if you didn't saw these already I recommend to you that you go to my account and have looked to have a full-depth-overview of the analysis in the gold-silver ratio and its interrelation to gold and silver.
When looking at my chart you can see that the ratio is trading in a huge and fundamental downtrend-channel which you see marked in blue. We already touched the channel lower and upper boundary several times to form the overall downtrend-related channel. At the moment the ratio fell down from an important support-point at the 109 level, you can see this big red candle to the downside with high volatility it is suggesting that the ratio is turning to the downside here and that we will continue in the downtrend-channel until important support has reached.
The next time we can expect a bounce back to the 109 support/resistance level where the likelihood increases that the downtrend continues when the huge heavy bearish-confluence-cluster zone you can see in my chart is confirmed. We have several resistances there which building the logical resistance-level, first it is the 50-EMA which you see marked in blue, second, it is the 109 support/resistance level and third, it is the upper boundary of the falling downtrend-channel, therefore, I don't expect a breakout of the channel here so far and the rise to the downside will continue.
In this situation it has to keep in mind that the worth fullness of silver compared to gold rises, this is insightful because at the moment we see more volatility to the upside and sharp rises in silver than in gold, it also means that the value of silver can increase higher and gold gets cheaper compared to silver which is an indication for the bullishness I mentioned already in the silver-analysis. Investors and traders can take advantage of it when the ratio drops more to buy silver instead of gold or to exchange the gold for silver for a later exchange back when the ratio increases again. This should be a good opportunity to make a profit out of the situation with gold and silver.
Alright, this should give you a good overview, thanks to everybody for watching, support for more market insight, and all the best! The ambition to transform opportunity into gold remains the most significant tool for a trader. In this manner: FAREWELL
Information provided is only educational and should not be used to take action in the markets.
Comment
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ANALYSIS UPDATE: The gold-silver ratio continued with the bearish pullbacks and bearish momentum acceleration to reach the final target zones.
The gold-silver ratio after reaching the final target zones continued with a massive bearish breakout and continuation of the pullback boundary channel.
Silver used to be at the 9:1 ratio, Bear Stearns, later taken over by WB and JPM have been holding the majority of the contracts for years.
Silver is now used in lots of industries, including Mobile phones, solar panels and EV's, and lots of it end up in landfill. Although Gold is used in manufacturing too, it is readily recouped and recycled, although it's biggest use is jewellery and watches.
Because the price is low, miners are not too interested in getting it out of the ground. Recyclers also are not that interested in recouping it.
This means that Silver is becoming more scarce!
JPM have more contracts for Silver than they own physical silver to back it up.
This means, at least to me, that someday there will be a short squeeze, and if investors realise there is a run for delivery of physical silver from JPM's clients, they will all be demanding delivery of the commodity they are actually paying JPM for storage! (THIS is the reason the price is so low, JPM have been playing fast and loose with the rules for decades!)
Jpm will then have no choice but to fulfill their orders, having to buy physical silver at ANY price to cover their orders.
The ratio touched 110:1 recently, if the price were to return to it's correct ratio silver should be over $1100 per kg! a correction is surely coming!
I have physical silver in my stash, and I will be keeping it for my retirement ;-)
VincePrince
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@Slippery09, Thank you, interesting suggestions do you mention there.
Hellena_Trade
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Your forecasts are always precise and valuable. 👏 Keep up the good work!
AMERICANHANDYMAN
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July 27th, ratio is 75 and dropping like a stone! Can silver keep up this unprecedented move!?
Gold reaching near 2k as well, looks like the cats outta the bag.
VincePrince
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@AMERICANHANDYMAN, Hi, interesting question, you are welcome, I made update about it. Greetings.
VincePrince
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Post your comments, questions, and ideas about GOLD SILVER RATIO here.
Silver is now used in lots of industries, including Mobile phones, solar panels and EV's, and lots of it end up in landfill. Although Gold is used in manufacturing too, it is readily recouped and recycled, although it's biggest use is jewellery and watches.
Because the price is low, miners are not too interested in getting it out of the ground. Recyclers also are not that interested in recouping it.
This means that Silver is becoming more scarce!
JPM have more contracts for Silver than they own physical silver to back it up.
This means, at least to me, that someday there will be a short squeeze, and if investors realise there is a run for delivery of physical silver from JPM's clients, they will all be demanding delivery of the commodity they are actually paying JPM for storage! (THIS is the reason the price is so low, JPM have been playing fast and loose with the rules for decades!)
Jpm will then have no choice but to fulfill their orders, having to buy physical silver at ANY price to cover their orders.
The ratio touched 110:1 recently, if the price were to return to it's correct ratio silver should be over $1100 per kg! a correction is surely coming!
I have physical silver in my stash, and I will be keeping it for my retirement ;-)