From a buy and hold perspective, owning Gold & Silver since the highs in 2011, has not been a high returning strategy.

Is this trend of lower highs and lower lows about to end? Is the Bear about to break free from years of frustration?  Below looks at the Silver (SLV)/Gold (GLD) ratio over the past decade.

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Historically both Gold & Silver have done very well when the ratio above is heading higher. The opposite is also true, that both Gold & Silver have struggled when this ratio is heading south.

The ratio has remained inside of falling channel (1), since 2011.

The ratio is testing breakout levels again at (2) this week. If the ratio can breakout above falling channel (1), it would send the first risk on message in years. If the ratio breaks out of falling channel (1) and can clear last summer highs, it would be sending the first bullish message in years!

Full disclosure- Premium and Metals members are long Junior Gold Mining stocks (GDXJ) since 12/27/16, with a tight stop.

 

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