Gold And Silver’s Potential Bullish Pattern

The chart below looks at the ratio between silver and gold over the past 30 years. Metals bulls historically receive a bullish message when this ratio moves higher. Back in 2011, the ratio hit highs that took place in the early 1980s and it’s been downhill for gold and silver ever since. Is this long-term trend in metals be about to change?

Silver/Gold Ratio

The decline in the ratio has it testing the 20-year support line (1), which has held several times over the past 20 years.

Over the past couple of years, the ratio has tested the support line (1) at (2), which has held. While testing line (1), the ratio could be creating a bullish inverse head-and-shoulders pattern.

If the read of the inverse head-and-shoulders pattern is correct and falling resistance is broken to the upside at (3), the ratio could be sending a bullish message not often seen over the past 7 years.

What do metals bulls NOT want to see? Support line (1) fails to hold! If it does, the ratio will continue to send a concerning message to the precious metals markets.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Leave a Reply

Your email address will not be published. Required fields are marked *