While the US dollar is soiling itself so far this week, the Gold/Silver ratio (GSR) maintains a rally stance. So one of the 2 Horsemen is firm at least. However, without a global liquidity receiver like the USD in play it is questionable how negative a rising GSR may be, if at all.
I had originally thought the first stage of the precious metals sector correction could end with the GSR poking its 50 day average and the final stage weeks/months later could end with it poking the 200 day average, which is declining toward clear resistance area.
If GSR fails here, it’s probably risk back ‘on’ for a more speculative precious metals rebound with silver leading. But it looks poised for more upside which could either bring more corrective activity or a situation like early last year, where gold stocks went up as the GSR also went up.
I want to go easy on the potential interpretations. But GSR does look like it is forming another bull flag. Let’s see what it does as it rests on the 50 day average and the EMAs 10 and 20 rise toward the price.
