The ratio of Gold (GLD) to the Euro (FXE) is breaking a 13-month symmetrical triangle higher, as shown in the chart below. Consolidating the break higher at 1.32, it has a target from the pattern break to 1.51.
If that move happened solely from a move in gold prices, it would mean a move higher to about 1960 for the metal. The indicators shown -- Relative Strength Index (RSI) and Moving Average Convergence Divergence indicator (MACD) -- also support a move higher in the ratio. And the same thing is showing up in silver's ratio chart (SLV) to the Euro, below, only that triangle is six-months longer. The target for that pattern is to a ratio of 0.385, or over 50% higher, which would bring silver back close to $50 if, in fact, that's been driving the move. This chart looks like it needs a
consolidation first, though, with the RSI in overbought territory. $1960 for gold and $50 for silver. Wow! But of course those ratios can reach their targets by changes in the Euro as well. The thing is, the Euro is moving higher, working against the ratio. Are you ready for new all time highs in these metals?
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