Valuable metals have been a red-hot funding in 2020.
Gold briefly broke $2000 this month, whereas Silver touched up close to $30.
However it’s been the rally in Silver costs that has been eye-popping. And maybe a giant cause for the additional momentum we noticed this summer season in valuable metals.
Sometimes, when silver outperforms gold, it provides “beta” and results in good issues for valuable metals.
In right now’s chart, we seize this with by way of the Silver (SLV) to Gold (GLD) ratio.
Whereas the ratio has been in a downtrend for the previous 9 years – see (1) and (2) – the ratio has rallied sharply over the previous four months. The truth is, the ratio posted its largest 16-week rally in 13 years.
So what can we make of this?
First off, it’s testing resistance so it shouldn’t be stunning to see valuable metals take a breather right here. That stated, if/once we see a breakout over the downtrend line, will probably be very bullish. Keep tuned!
Silver/Gold Ratio Chart
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