Gold Vs SilverGold has recently broken out of a prolonged five-year consolidation phase, signaling a bullish trend continuation. In contrast, Silver has not exhibited a similar breakout, resulting in a relative outperformance of Gold. This divergence is reflected in the comparative chart, which is showing an upward move in favor of Gold.
On the daily timeframe, Gold appears to be in a slightly overbought zone when compared to Silver, primarily due to the latter's underperformance.
Any potential retracement in Gold relative to Silver could present a favorable opportunity to position for a continued bullish trend in this ratio.
Please note that this analysis specifically focuses on the Gold-to-Silver comparison. For actionable trade decisions, it is advisable to refer to the individual charts of both instruments.
From a broader perspective, the monthly chart of Silver suggests the formation of a rounding top pattern. However, on the daily chart, confirmation via follow-through price action is necessary before drawing definitive conclusions.
Goldsilverratio
Silver : Time to go long ?Silver is trading near the support of Golden Ratio (61.8%). Silver had faced hurdle at $ 14.60-15 range when it posted bottom at $ 13.89. It has now become support zone.White metal has bounced from 61.8% retracement of rally from $13.89 to $16.21 which is $14.78. Resistance on higher side is at $ 15.12 and $15.40. ROC and Stochastic are showing positive divergence on daily chart.Historically, Gold Silver ratio has averaged around 66 level which is now trading at 85. If we assume that mean reversion will take place in near term, then at $1400 price of Gold (analyst consensus), silver should trade at $ 21 level. CFTC Non Commercial net position has dropped from high of 58300 long (5-Marc-19) to 5900 long in last reading of 20th April.Silver had posted $ 13.70 bottom in Dec 2015 and then we saw rally towards $21 in just 6 months of time frame.
Our take : Buy Silver on daily close above $ 15.12 with stop loss of $14.70 (daily closing) for target $ 16.21- $17.20.