Gold/Silver Ratio: Rising for a Month Now

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Well, look who is sporting a bullish looking pattern on its daily chart. It’s probably NFTRH‘s most watched indicator outside of the T Bond Continuum.

As you can see, a rising Gold/Silver ratio (GSR) attended the market stock market disturbances in February and March and a declining GSR has attended the relief, i.e. the expected ‘top-test’ by the S&P 500 that has ground on since roughly the same time that GSR topped in late March.

The GSR has spent a lot of the post-financial crisis era in dysfunction mode, but so far in 2018 it is working as we’d normally expect; it rises with market liquidity contraction and declines with risk ‘on’ and an absence of liquidity events.

So, is that indeed a bull pattern? Can we assign such TA to a ratio as opposed to a stock or an index? Valid questions, but all things being equal stock and/or commodity bulls would probably rather not see a pattern like that. What can’t be argued is that gold’s ratio to silver has been increasing for a month now.

gold/silver ratio

For fun I added the Premium/Discount data for the gold/silver bullion fund CEF in the lower panel. Gold bugs won’t buy gold and silver right now for even a 4% discount. It ain’t contrarian bearish when the bugs are upset like that.

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