To say that silver has been on a tear the past couple of months would be putting it mildly, but after selling off some 61.8% (perfect Fibonacci retracement as it happens) from the highs back in 2011, to the lows at the end of June, it’s hardly surprising.
Silver $ (daily):
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We can see that from the low on June 28th at $18.20 silver has now put on over 35%.
In fact we only have the resistance from the end of May left to take out before silver can have a free-run at recapturing the $27.5 level.
Silver $ (daily):
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The bigger picture for silver shows the metal still has to get back above 27.50 to fully signal this bear correction is over – however, with the pace that silver is moving at right now this is only a good day’s trading away.
Silver $ (daily):
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In terms of the moving averages silver is now safely back above the 55DMA, the 100DMA and is now only 6% away from its 200DMA – exactly the same set-up as gold. This is the next target the silver bulls will have in sight.
In terms of the gold:silver ratio we can see the silver has been outperforming gold for the past few weeks with the ratio compressing by 14% since the start of August.
Gold:silver ratio (6 month):
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The longer-term picture of the ratio is that at the end of July the ratio reached a three year high at 67 – the last time the ratio neared 70 was back in August 2010 with silver trading around the $18 level. The ratio then collapsed all the way down to just 33 when silver reached $47 – are we about to witness a repeat?
Gold:silver ratio (5 year):
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Silver price now up 35% from the lows in June as the gold:silver ratio keeps compressing
