Metals Look Bullish As Evidenced By Gold to Silver Ratio

As noted by Tiho Brkan (Short Side Of Long), we now have a classic double bottom in place, most likely signalling more buying to come. If the price can overcome a resistance at $1,250 per ounce, Gold would set itself up for a higher high. After that, we have the resistance of the 200 day moving average around $1,285.



Adding evidence to the bullish case, is the magnitude of how oversold Silver became. On Monday Asian trading hours, Silver was being dumped so quickly that it reached 80 on the ratio between it and Gold in matter of hours. This level isn’t a magic by any means, but has usually been some kind of a historic floor and good buying spot. We have seen major bottoms at this ratio level in 1986, 2001, 2008 and maybe even currently (in early 1990s ratio widen even more).



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