The Gold-to-Silver ratio has recently moved from peak levels, near 125, to 73.1. This downward ratio collapse is the result of the incredible upside price move in Silver recently. Historically, this Gold-to-Silver price ratio should target levels near 55 (or lower) as Silver rallies to comparable price levels to Gold. In 2010~2011, the Gold-to-Silver ratio fell to levels near 31. This happened when Gold rallied to near $2,000 and Silver rallied to near $50. Currently, Gold is trading just below the $2,000 level and Silver is trading near $27.50. This suggests that Silver still has another $24+ of rally waiting to explode higher if the fear and uncertainty expectations are similar to 2010~2011.
Should Gold rally to $2,400 or higher, there is a very strong possibility that Silver could rally above $60 per ounce while Gold continues to move to near all-time highs. In short, we believe this move higher in metals will likely continue as we head into the US Presidential Election and post-election transition.
From a trader’s perspective, the upside price trend, and the bigger downside price move setting up in November 2020 Presidential election cycle, presents very real opportunity for huge gains if you know how to time these moves and prepare for the risks. Right now, this market and the profits therein are fantastic opportunities for skilled technical traders. As we suggested throughout 2018 and 2019, 2020 and 2021 are going to be incredible opportunities for skilled technical traders. This is just getting started, folks. Pay attention and avoid unnecessary risks.
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Chris VermeulenChief Market StrategistFounder of Technical Traders Ltd.
NOTICE: Our free research does not constitute a trade recommendation, investment or trading advice, or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only. Our research team produces these research articles to share information with you in an effort to try to keep you well informed.