Historically, when gold is stronger than silver, metals bulls have not made quality buy-and-hold gains. But when silver outperforms gold, both have done pretty well on a buy-and-hold basis.
The chart below shows the gold:silver ratio since 2008 and indicates that a very important price point may be at hand.
When the ratio turned higher back in 2011, gold, silver and the mining stocks started heading lower for the following 5 years. This shows that gold is stronger than silver, which historically is when metals struggle to make quality upside gains.
The ratio at (3) is testing a 6-year rising support line. If one is bullish gold and/or silver, you want to see this ratio breakdown at (3) and start heading a good deal lower (silver stronger than gold).
If the ratio breaks out at (4) and starts moving a good deal higher, history suggests that the metals and mining sectors will struggle to move higher (most likely weaker). Gold, silver and mining-stock bulls have are hoping a breakdown happens.
Bottom Line
This could be a very important inflection point for the metals sector.