During bull markets for precious metals, silver tends to lead. Similar to small caps, it adds “beta” when bulls are in control. To measure this aspect, investors can look at the ratio of Silver to Gold. When this ratio is heading higher, it’s bullish. Lower is bearish.
The original article has been edited here for length (…) and clarity ([ ])
In the chart below, I look at the last 20 years of the Silver Gold ratio. Several advances started from a critical support line at (1). As well, the ratio has formed a bullish falling wedge pattern (2) and looks to be on the cusp of breaking out of the pattern (3).
Silver/Gold Ratio Chart – 20 years
(Click on image to enlarge)
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