Gold vs. Silver - Very Important Medium-term Signal / Commodities / Gold & Silver 2024

Gold and silver soared and plungedtogether, but… Not at the same pace. And this can tell a lot.

RecentMovements and Their Implications

The way in which both precious metalsmove relative to each other is not random. It has specific rhythms andpatterns, and understanding what it means can give one an extra edge over othermarket participants. Every now and then, thegold-to-silver ratio moves in a specific manner that indicatessomething important for the following weeks – and that’s exactly what happened.

What you see on the below chart is theinverse of gold to silver ratio – the silver to gold ratio. It makes nodifference, in which way one analyzes it, I simply prefer it to view it in thisway.
Let’s check what happened.



Silver soared not just on its own butalso relative to gold. I wrote silver’s outperformance is usually bearish onmany occasions, but the intensity withwhich silver showed strength recently is so significant that it’s visible on a14-year chart!

Indicators are great tools to average outwhat’s not important and focus on what is and make specific situations from thepast comparable. The two that are particularly useful for comparing thesituations in case of the silver to gold ratio, are the Relative Strength Index (RSI) andRate of Change (ROC) indicators.

When we saw RSI at or above 70 AND ROCafter a visible run-up, silver topped. I marked those cases with red lines onthe above chart. This combination of signals from both indicators worked in each case in the past 14 years, so thefact that we saw it once again does not bode well for the near-term future ofthe white precious metal.

HistoricalComparisons and Current Trends

Silver soared over $32, but it’s backbelow $31 at the moment of writing these words. Given the momentum, the recentoutperformance, and silver’s tendency to form fake breakouts, it seems that it can dive back below $30 any day now.

LastFriday, I commented on silver in the followingway:

Silver soared where it had soared in 2021at its top. It was when volume confirmed extreme interest when silver moved tothe previous top, which even was at the same (nominal) price level that we seeright now (approximately).

Can silver’s rally be trusted this time?Why would we?

Because silver’s fundamental picture isgreat (structural shortage etc.)? It was great also in 2021. And in 2008. Yet, the white metal plunged in both years and on many otheroccasions.

And you know what else happened more orless when silver topped in 2021? Meme stocks (e.g. GME) topped after soaring.

That’sexactly what we just saw once again!



Ok, the volume is lower as fewer peopleare interested, but the sudden jump in prices and RSI above 90 make the analogyclear.

It’s the investment public that’s mostlikely buying – that’s the topping sign.

Miners declined after that top, and… Do you remember what else formed a massive,volatile top at that time when everyone and their brother expected it to shootfor the moon? Silver.

To be clear – I do think that silver isgoing to soar to new highs and likely well above $100 (possibly even over $200)in the following years, BUT at this very moment, silver appears to have topped,and if stocks plunge while the USD Index rallies, then the silver price wouldbe likely slide in a particularly volatile manner.

Gold might provide a good buyingopportunity soon, but I’ll leave the details to my subscribers. For now, thankyou for reading today’s free analysis.

Please note that we currently have a verytime-limited promotion allowing you to subscribe to my Gold Trading Alerts atpromotional terms – the first week is for just $1, so if you’re interested inreading about gold’s upcoming buying opportunity, it’s very easy to do so. Sign upfor $1 today.

Thank you.

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Toolsfor Effective Gold & Silver Investments - SunshineProfits.com

Tools für EffektivesGold- und Silber-Investment - SunshineProfits.DE

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Disclaimer

All essays, research and information found aboverepresent analyses and opinions of Przemyslaw Radomski, CFA and SunshineProfits' associates only. As such, it may prove wrong and be a subject tochange without notice. Opinions and analyses were based on data available toauthors of respective essays at the time of writing. Although the informationprovided above is based on careful research and sources that are believed to beaccurate, Przemyslaw Radomski, CFA and his associates do not guarantee theaccuracy or thoroughness of the data or information reported. The opinionspublished above are neither an offer nor a recommendation to purchase or sell anysecurities. Mr. Radomski is not a Registered Securities Advisor. By readingPrzemyslaw Radomski's, CFA reports you fully agree that he will not be heldresponsible or liable for any decisions you make regarding any informationprovided in these reports. Investing, trading and speculation in any financialmarkets may involve high risk of loss. Przemyslaw Radomski, CFA, SunshineProfits' employees and affiliates as well as members of their families may havea short or long position in any securities, including those mentioned in any ofthe reports or essays, and may make additional purchases and/or sales of thosesecurities without notice.

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