The reliability of the gold/silver ratio for timing silver buys is difficult to overstate, and this chart does a fantastic job summing it up.
What’s so remarkable is not that the ratio, when it’s over 80, sets the bottom for silver (which it does), it’s that it presages sharp upside movement, again and again.
During bull markets for precious metals, silver tends to lead. Similar to small caps, it adds “beta” when bulls are in control.
To measure this aspect, investors can look at the ratio of Silver to Gold. When this ratio is heading higher, its bullish. Lower is bearish.
In the chart, I look at the last 20 years of the Silver Gold ratio. Several advances started from a critical support line at (1). As well, the ratio has formed a bullish falling wedge pattern (2) and looks to be on the cusp of breaking out of the pattern (3).
A breakout here would “spring” silver much higher, and likely carry gold with it.
ORIGINAL SOURCE: Silver Gold Ratio… Set To “Spring” Precious Metals Higher?[1] by Chris Kimble at See It Market[2] on 4/20/18...
References
- ^ Silver Gold Ratio… Set To “Spring” Precious Metals Higher? (www.seeitmarket.com)
- ^ See It Market (www.seeitmarket.com)