For the last couple of weeks silver has notably outperformed gold by a margin of more than 2-1:
Silver vs. Gold (March 16th-March 28th 2017)
Taking a look at a 5-year chart of the $SLV - $GLD ratio we can see that this ratio is near a potentially crucial crossroads:
SLV/GLD Ratio (Weekly - 5 Year)
A breakout above ~.148 in the ratio would target a move up to the .165-.170 area. Translating this to actual gold and silver prices at $1,300/oz gold a SLV/GLD ratio of .17 would mean that silver is at $22.10/oz.
Lets not get too far ahead of ourselves but there is plenty of reason for optimism with the silver/gold ratio above a rising 50-week moving average and on the verge of snapping a string of lower highs since the summer 2016 peak. Additionally, a rising silver/gold ratio has historically correlated with bull market periods for precious metals and mining shares.
While there has been plenty of reason for caution in precious metals and mining shares in recent weeks, the bullish price action in silver is not one of them. Shrewd market participants would do well to pay close attention to this ratio over the coming days/weeks.
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.
