One of the most important indicators available in the precious metals sector is the ratio between gold and silver. In the last twenty years, the ratio has reached three times the value of 82 which has always represented an excellent buying opportunity, not only for the silver but also for the gold stocks sector. In the three years following the first two signals, silver has grown +230% and +460%, respectively, while in 2016, silver went up by only 45%.
In the last few months, the ratio has always remained in a range between 82 and 86, but the bearish wedge pattern makes possible a sudden fall in the ratio, which would favor silver in a surprising way. The positive divergence confirms the possible bearish reversal of the ratio that would favor the silver. The return below the level of 82 first and then 80 will be the confirmations we need.
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Stefano Bottaioli Technical Analyst / Investment Consultant
Stefano Bottaioli is an investment consultant working since 2000 at Banca Consulia. He has worked in financial markets as technical analyst, portfolio manager, chartist and consultant. He combines cyclical analysis with technical systems, discretionary charts, all based on Elliott and DeMark systems. Stefano publishes a financial Blog – www.stefanobottaioli.it – a daily appointment regarding the news from the markets, opportunities and trading ideas above all in commodities, such gold & gold stocks (available mainly by subscription).