While the Head and Shoulders pattern is often associated with a topping formation (or bottoming in the case of an inverse head and shoulders), it can often show up as a continuation pattern.
Since most of the articles I have read recently about the Gold:Silver ratio state that silver comes out of the ground together with gold in a15:1 ratio, that the market should value this ratio at a level closer to that rather than the recent levels of 80. Some state that historically a ratio of 30 silver to 1 gold is the average. TradingView data goes back 20 years and the chart is quite revealing. It does appear that, based on the head and shoulders continuation formation, that gold is set to greatly outperform silver going forward.
Recently, both gold and silver have been falling due to higher US interest rates and a subsequent rising dollar. Silver's recent attempt to reach previous highs of several weeks back failed and the reversal appears to be strengthening, possibly causing silver (SLV) to fall to 13 or even under 10! On the opposite side, in an effort to by-pass US sanctions on Iran, Russia and other countries are looking for alternative payment methods instead of the US dollar. This might add demand to the gold side of the equation.
Nothing is yet written in stone and a breakout and test of that breakout level still needs to occur for this ratio to fulfill the measured move expectations of the head and shoulders pattern, but it's good to know that perhaps the more common narrative that the gold silver ratio is too high and needs to come down, along with the other common narrative that the Commitment of Traders report shows that speculators are heavily short silver proves that silver is due for a pop, may all be wrong.
Since most of the articles I have read recently about the Gold:Silver ratio state that silver comes out of the ground together with gold in a15:1 ratio, that the market should value this ratio at a level closer to that rather than the recent levels of 80. Some state that historically a ratio of 30 silver to 1 gold is the average. TradingView data goes back 20 years and the chart is quite revealing. It does appear that, based on the head and shoulders continuation formation, that gold is set to greatly outperform silver going forward.
Recently, both gold and silver have been falling due to higher US interest rates and a subsequent rising dollar. Silver's recent attempt to reach previous highs of several weeks back failed and the reversal appears to be strengthening, possibly causing silver (SLV) to fall to 13 or even under 10! On the opposite side, in an effort to by-pass US sanctions on Iran, Russia and other countries are looking for alternative payment methods instead of the US dollar. This might add demand to the gold side of the equation.
Nothing is yet written in stone and a breakout and test of that breakout level still needs to occur for this ratio to fulfill the measured move expectations of the head and shoulders pattern, but it's good to know that perhaps the more common narrative that the gold silver ratio is too high and needs to come down, along with the other common narrative that the Commitment of Traders report shows that speculators are heavily short silver proves that silver is due for a pop, may all be wrong.