A review of targets we’ve already covered for the Silver/Gold ratio (SGR) now that nominal silver is breaking resistance and gaining notoriety among a wider array of casino patrons. To review, a rising SGR indicates inflationary spirits rising and is positive for precious metals, commodities and resources, and generally benign for stocks.
Daily SGR is approaching a lateral congestion area and the channel top after making the key higher high to May and taking out the 200 day average.
Weekly SGR shows the channel in its entirety. While it could be contained there I’ve been speculating that the 5th leg up could be the strongest leg yet and could take out the channel for a shot at the noted resistance zone. That could imply more party time before we ultimately would need to really ramp up the risk signals. But first things first. SGR lurks just a hair below a logical resistance area now.
The monthly chart reminds us that in the grand scheme of things, even a run to the red resistance line would not signal a great new inflationary phase. Take out that zone and get ready for a full frontal Crack-up-Boom, or something along the lines of a devastating or exhilarating inflation problem (depending on your perspective). Until then, it’s a snap back, a reaction and a temporary money making opportunity that has been in progress since March.