Monday, July 4, 2016

GOLD:SILVER Ratio Weekly Chart

Here is an update of the gold:silver ratio chart Keystone posted a few months ago. Type "gold silver ratio" in the search box in the right margin to go back and study that technical analysis. The prior chart was in the blue circle at the top trend line of that large sideways purple channel. When the gold:silver ratio moves from the lower line to the upper line, gold outperforms silver. Conversely, when the ratio moves from the upper line down towards the lower line, silver outperforms gold.

At the beginning of this year, the ratio was printing in the blue circle at the top trend line so the educated guess is that over the months and years ahead silver should outperform gold. This does not mean that both precious metals go higher. It simply means that if they are moving higher silver will move higher faster, and, if the metals are selling off, silver will be hurt less than gold in a down move.

The move off the top for the ratio has come quickly from 85 down to near 65 so far and silver is clearly outperforming, in fact, silver is the top performing commodity. It is worthwhile to watch the ratio to see how it proceeds over the coming months and couple years. The gold bugs were happier than the silver bugs for nearly 5 years but it looks like silver will shine a little bit brighter than gold for a few years going forward like the period from 2009-2011.

Back then, former Fed Chairman Bernanke prevented markets from clearing, stepped on the neck of capitalism and free markets, and started printing money like a madman to pump the stock market higher with QE 1 (quantitative easing). So silver greatly outperformed fueled by the easy money from central bankers in 2009 and 2010. Traders perhaps expect lots more central banker easy money nowadays and silver is already anticipating the easy money party. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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