Gold:Silver Ratio Daily Chart Oversold Falling Wedge Positive Divergence

Gold:Silver ratio chart indicators are buried in the cellar. There is no direction for price except up from here. Speculators make bold calls, a silver short now is probably the most bold call that can be made in these current markets. Silver and gold have moved up during the last couple years but silver has outperformed gold significantly (silver has moved up by a higher percentage than gold for over two years). Think back to fractions in math class. When the top number (numerator), gold, moves lower and the bottom number (denominator), silver, moves higher, relatively, the ratio falls.

The preferred way to use the gold:silver ratio is to help time when you should swap your silver for gold and gold for silver. As the ratio moves towards the 90+ level (Fall 2008), it tells you to sell your gold and move that money into silver; those traders are happy campers. As the ratio moves under the 50 level (2011-now), it tells you to sell your silver and move into gold since gold will outperform silver moving forward thru the months ahead. The 50 level has been overshot to the downside to 35; this does not change the relation, it simply makes the timing more difficult. But considering the oversold conditions, falling wedge and positive divergence, the end of the silver ride is close at hand. At the very least a dead cat bounce is in order to simply provide relief from this waterfall move down.

Remember, gold outperforming silver from here on out does not mean they both go up forever with gold moving a higher percentage up than silver. It can mean that, but it also means that as both gold and silver fall in price in the months ahead, yes, sell off, gold will fall less than silver percentage-wise.

Speculation is the most dangerous type of trading but those that do it are drawn to trades like this like a moth to a flame. Shorting silver began today in this 42.0-42.30 range so over time we will see how this dangerous trade plays out. This ratio says that gold will now outperform silver moving forward and silver's 2 1/2 year rein is over.  This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.