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Gold, Silver Test 6-Year Breakout — Again

ByChris Kimble
Published 02/14/2017, 11:10 AM

From a buy-and-hold perspective, owning gold and silver since the highs in 2011 has not been a high-returning strategy.

Is this trend of lower highs and lower lows about to end? Is the Bear about to break free from years of frustration? Below looks at the SLV/Gold ratio over the past decade.

iShares Silver Vs. SPDR Gold Shares

Historically, both gold and silve have done very well when the ratio above is heading higher. The opposite is also true -- both have struggled when this ratio is heading south.

The ratio has remained inside of falling channel (1) since 2011.

The ratio is testing breakout levels again at (2) this week. If the ratio can breakout above falling channel (1), it would send the first risk-on message in years. If the ratio breaks out of falling channel (1) and can clear last summer highs, it would be sending the first bullish message in years.

Latest comments

sorry I meant 1315-8
Gold expected to test 1215, even 18
OK Chris. This is crazy. Gold is powering up and Silver is still up it but is walking 3 paces behind and it looks completely like their ratio are surgically tracing up the support line, with silver obediently walking 3 paces behind.. . 1. Can the gold price continue to rise, regardless of what silver doing? (Technically speaking, of course). 2. Is this obedience to an 'abstract?' multi-year, moving average ratio common?. 3. If copper has another blast up in price, will it likely (based on historical data) drag silver price up with it, especially through this silver/gold ratio?. . Your succinct and clean analysis is a favorite of mine, and I appreciate your opinion.. . . Thanks very much in advance
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