The past 6 years have not been fun for the precious-metal buy-and-hold investor. Is that trend in gold, silver and the mining space about to change? It looks like a price point is in play where a trend reversal could start to take place.
Below looks at the US dollar/gold ratio over the past 30 years.
From 2001 to 2011 the ratio fell, showing that gold is stronger than the USD. Since 2011, the ratio has risen sharply, reflecting that the dollar has been much stronger than gold at (1).
The ratio remains in a long-term down trend and a 6-year rising trend. A potential “resistance cluster” is in play at (2) above.
If the resistance holds at (2) and the ratio turns lower, gold, silver and the miners would benefit. This is one of the most important potential inflection points for gold/USD in years.
Full Disclosure: Premium and Metals Members have been long Junior Miners (NYSE:GDXJ) for the past couple of weeks. We shared a week ago that mining stocks could be poised to outperform that S&P 500 for years to come.