Gold / Silver ratio hints of a coming trend change

Gold / Silver ratio hints of a coming trend change

As the price of gold and silver continues to correct within their respective consolidation zones we are seeing a fall in the Gold / Silver ratio.
In a previous post (see below) we discussed how whenever the gold silver ration gets into the 80's it usually marks out a price bottom and precedes a large break out and price surge in both metals.

Let's take a look at where the ratio is today:

As you can see the ratio has turned down fairly aggressively over the past few weeks. At the moment this is primarily down to weakness in gold and resilience in silver. However, if the ratio continues to turn down it the likelihood is that strength in the metals will return. It would be highly unusual to see continued weakness in gold while silver remains resilient.

My view is that the consolidation that we have been seeing in both metals is going to come to an abrupt end in the very near future and almost certainly before September 2018. Given everything else that is occurring in the markets I think that the end of consolidation will result in a break out rather than a break down. In the short term however we may continue to see some choppiness.

For disclosure, I'm not a professional advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.


I am just waiting for the ratio to reach 50. Then I will sell all my silver bullion to buy gold bullion.

why 50 ronaldo? if you allow me to ask

If you see the above chart during the last 30 years, you will see that the ratio gold/silver is almost always between 40 and 80. So, if you were following the chart and sold the gold and bought silver at around 75 and then sold silver and bought gold at around 45, you would have made this operation about 6 or 7 times in 30 years. Today you would have much more silver than you began, without putting new money on it.

Sounds like a good approach. You will still be exposed to metals and gold is much cheaper to store - unless of course it goes 1 to 1 (highly unlikely). Personally I'd be tempted to sell half just in case.

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