Understand Gold & Silver with the GoldSilver Ratio
Gold & Silver investors, you need to keep an eye on the gold to silver ratio. The ratio helps us in deciding how to allocate our portfolio with gold and silver.
The ratio can also help us to identify trend changes and understand what is happening in the metals market. During a metals bull-market the ratio moves decisively lower.
On the chart you can see that metals bottomed out in January 2016 when the goldsilver ratio peaked out at decade+ Long resistance. It then surged lower from 83 to 63. Thats when Gold moved from $1045 to $1375 and silver moved from $13 to $21.
You can also see that the ratio surged past key resistance and peaked out at 93. This move higher was initially driven by lower metals prices due to a hawkish fed. When the Fed did a 180 and began to cut rates, gold surged higher from 1180 to 1350 and correcting back to 1285. During this time silver severely lagged gold causing the GS ratio to peak at 93. Then gold brokeout and surged past $1400 and $1500 and silver tagged along hitting $19. This is when the GS ratio surged lower from 93 to 80.
We’re currently undergoing a healthy correction in gold & silver. The GS ratio may inch higher.
What we do not want to see is 88 recaptured and 89 recaptured. Could mean the GS ratio continues to breakout - a bearish scenario for silver & gold.
What I think is more likely is gold surging to $1700 and $1800 after this correction, with a silver that potentially hits $25. We want to see the GS ratio moving lower for this scenario.
The ratio can also help us to identify trend changes and understand what is happening in the metals market. During a metals bull-market the ratio moves decisively lower.
On the chart you can see that metals bottomed out in January 2016 when the goldsilver ratio peaked out at decade+ Long resistance. It then surged lower from 83 to 63. Thats when Gold moved from $1045 to $1375 and silver moved from $13 to $21.
You can also see that the ratio surged past key resistance and peaked out at 93. This move higher was initially driven by lower metals prices due to a hawkish fed. When the Fed did a 180 and began to cut rates, gold surged higher from 1180 to 1350 and correcting back to 1285. During this time silver severely lagged gold causing the GS ratio to peak at 93. Then gold brokeout and surged past $1400 and $1500 and silver tagged along hitting $19. This is when the GS ratio surged lower from 93 to 80.
We’re currently undergoing a healthy correction in gold & silver. The GS ratio may inch higher.
What we do not want to see is 88 recaptured and 89 recaptured. Could mean the GS ratio continues to breakout - a bearish scenario for silver & gold.
What I think is more likely is gold surging to $1700 and $1800 after this correction, with a silver that potentially hits $25. We want to see the GS ratio moving lower for this scenario.
Comment:
TLDR - I suspect 93 was the top in the GS ratio. Should see some moves lower and trend continuation to confirm. Strong moves higher is not good.
Trade active:
Technicals are pointing up on the Goldsilver ratio, which is bearish for silver and metals in general.
Be following closely. We will likely inch higher before a big move takes place = either up or down. Another high could be achieved - which would be a good time to buy some silver, or we'll see a reversal which will coincide with a rally in the metals and silver catching up to gold.
Be following closely. We will likely inch higher before a big move takes place = either up or down. Another high could be achieved - which would be a good time to buy some silver, or we'll see a reversal which will coincide with a rally in the metals and silver catching up to gold.
Comment:
GS Ratio is probing lower. exactly what bulls should want
Comment:
If this ratio moves higher - potentially to $100 - use that as a buying opportunity
Comment:
**100. Silver will be on sale
