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Gold /Silver ratio: A temporary crystal ball?

Commentaries & Views

Resistance at $1,980-85 is manifesting as expected, at least for the short term. A clean breach of $1,985 on a closing basis would open the door to $2,010.

A failure to push past $1,980-85 would likely see sellers step in, and a sideways grind commence before the next leg up begins in earnest. Silver is facing resistance at $25.90, but in this trader’s opinion, the precious metal should be given the bullish benefit of the doubt as long as $24.90 - $25 can hold up.

The gold to silver ratio continued to fall overnight, as suggested, but has found support at the trendline displayed on the chart below (daily timeframe). Precious metals bulls may consider using the ratio as a guide for when the next move will begin; of course, bulls would like the triangle to break to the downside for a move toward 69.5.

With a shortened holiday week, today’s close in major US indices may be a gauge for risk appetite and provide a vital clue as to whether stocks have finally put in a higher low from the bottom and are preparing for the next leg up.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.