Friday, September 11, 2009

Silver/Gold Ratio: Not Gold to Silver Ratio?

Looking at the Silver to Gold ratio, it appears that although silver has been outperforming gold as of late, this may be coming to an end soon. For this trend to continue, the silver/gold ratio would have to break above the 0.017 level and remain there.

This looks like formidable resistance that may be hard to take out. It seems that if it were broken decisively that the silver price would be able to continue its recent performance of the gold price. This would make sense to me seeing that silver was sold off much harder than gold during the last correction and has some catching up to do.

Add to that the fact that silver is extremely cheap in terms of gold.