After a lengthy uptrend stretching across the past 15 months, the gold/ silver ratio appears to have broken out of it’s uptrend channel, implying a new trend of silver out-performing gold, and one more indication that silver’s next major bull run has begun.
Silver typically out-performs gold during major bull runs as the market is so much smaller and more volatile.
After the ratio had stretched to over 70-1 in 2010, it narrowed nearly to 30-1 in April of 2011.
Over the past 15 months while silver has correctedthe ratio has been in a steady uptrend, reaching as high as 59-1.
That up-trend has been topping/consolidating (appears to be completing a rounding top, coinciding with silver’s rounding bottom) between 57 and 59-1 since late June, and appears to have decisively broken it’s 15 month up-trend over the past week.
The break of the gold/silver uptrend is a strong signal to swap physical gold for physical silver. If the last rally in the gold and silver bull markets is any indication, the ratio should narrow sharply during the next bull run, likely to 15 or 20-1.
A look at the 2 year chart of the gold/ silver ratio: