EDITOR NOTE: The author below illustrates a “technical” read on the gold/silver ratio. If you follow us, you’ll remember that we warned that the ratio was about to collapse as soon as it reached a 5,000-year high--how obvious was that, right? Well, the author argues below that the ratio is once again giving us a bullish signal. Our take? Look at the fundamentals and compare gold and silver prices. What presents the best bargain and potential for exponential growth?
When silver joins the party, it tends to add “beta” to the rally, similar to the way the stock market likes when small caps join the party.
Hi Ho Silver!
In today’s chart, we look at the ratio of silver to gold prices on a monthly basis.
A quick move below 30-year support (turned resistance) created a bullish reversal at (1).
Now, the silver-to-gold ratio is working on breaking back above the 30-year resistance line at (2).
This reversal has silver working on a bullish reversal breakout pattern. And this is sending a short-term bullish message for silver. Stay tuned.
Originally posted on Investing.com