It is time to explore the details of our
Gold vs. Silver ratio research and to start to understand the potential for
profits within this move in precious metals.
The first
part of our research article highlighted the Gold vs. Silver ratio and
why we believe the “reversion process” that is taking place in price could be
an incredible opportunity for traders.
Historically, when the Gold vs. Silver ratio reaches
an extreme level, and precious metals begin to rally, a reversion within the
ratio takes place, which represents a revaluation process for silver prices
compared to gold prices. This typically means that the prices of Silver will
accelerate to the upside as the price of gold moves higher – resulting in a
decrease in the ratio level.
This reversion
process related to precious metals pricing is an opportunity for traders to
take advantage of an increased pricing advantage to generate profits.
For every drop of 5.0
points in the gold/silver ratio, the price of Silver should increase by 6.5% to
7.5% to the price of
Gold.
This research is
based on our belief that Gold and Silver will continue to rally and potentially
enter a parabolic upside price advance soon. If this takes place and
precious metals begin to skyrocket higher, the ratio level will react in a
hyperactive “reversion process” where Silver may move higher at a rate that is
substantially faster than Gold. This is the process that we are exploring
and our researchers are attempting to shed some insight into this event.
I believe a reversion
process has already begun to take place within the precious metals
market. We believe this reversion process is about to explode as a
dramatic revaluation event unfolds over the next 12+ months. This process
will become more evident to traders as the price of Gold continues to rally
towards the $1750+ level and as the price of Silver explodes higher in larger
and larger advances.
Gold/Silver/US Dollar ratio chart
This Gold/Silver/US Dollar ratio chart is
the basis of our analysis for the reversion process event and the associated
revaluation event. Our previous analysis
suggests Gold will attempt a move to levels above $1650 to $1700 on the next
breakout move higher. This next upside
price move will expose the price reversion event for all traders to witness and
we have mapped out the expected Silver price advantage for all traders going
forward.
Gold/Silver Ratio – Silver Price vs Ratio Level
We put together this reference table to
assist all traders in understanding just how important this move could be to
them. This reference table shows the
current Gold/Silver price levels (in GREY) as the ratio levels change from 88
to lower levels.
If the price of Gold were to stay at the
same $1426 level while Silver rallied to prompt an 82 or 77 ratio level, the
price of silver would move from the current price of $16.19 to $17.39 or $18.52
in order to reflect this decreased ratio level.
That represents a 7.5% to 14.3% price increase.
Yet if the price of Gold advances to $1650
or $1750 while the ratio level drops to the 82 or 77 ratio level (because
Silver advances fast than Gold), then the price of Silver would move from the
current price of $16.19 to $20.12 to $22.73.
That move represents a 24.2% to 40.3% price increase in Silver when Gold
increased only 15.7% to 22.7%.
What If Silver Advances Quicker Than Gold?
If Silver advances even faster than our
“what if” scenario, above, and Gold continues to advance as we expect, the
increased price reversion process taking place in Silver as a process of this
revaluation event could result in a 70% to 110% fast price advance in Silver
than the price advance that takes place in Gold.
We believe the next upside price leg in
Silver will target $19.50 to $22.75.
This target range supports the highlighted area on our Ratio table
(below). In other words, we believe the
ratio level will attempt to quickly move toward the 70 to 77 level as Gold
prices rally over the next few months.
This would push silver up into the $22.50 to $25 price level very
quickly.
What If Gold Rallies Faster Than Silver?
If Gold were to rally above $1950 on an
extended upside price advance before August or September, we believe the
reversion process would become extremely hyperactive in nature and the price of
Silver could push well above $29~34 per ounce – may be even higher.
This declining ratio level acts as a
turbo-boost for the price of Silver as Gold continues to advance. The recent rotation to the downside suggests
the ratio relationship between Gold and Silver has already stated a reversion
process – the only question is “where will it end?”. Our researchers believe it will stop where it
stops and we believe the 65 level on the Ratio chart is just the initial target
for this first upside leg.
Imagine where Silver could go if the
ratio level fell to levels below 40 and gold
rallied to $2500 or more? Ok, stop
imagining and take a look at this second extended ratio table.
Pay attention to the fact that Silver could
rally more than 300% if Gold moves up above $1750 and the Gold/Silver ratio
drops below the 55 level. If Gold were
to continue to rally and the Gold/Silver ratio continued to fall, Silver could
rally well above $50 over the long run.
Silver Price Range As Gold/Silver Ratio Move To the
Average
We’ve attempted to graph the ranges of the
expected move in Silver into segments based on the Gold/Silver ratio to assist
traders in understanding just how powerful this setup really is. Imagine what it would take for Gold to move
up to levels above $1750 (which is our expected target for the next leg higher)
and for Silver to rally into the 55 to 65 ratio level. If that happens, the expected target price
for Silver would be somewhere between $30 and $40 – more than 100% higher than
the current price of Silver.
If you think $50 is unimaginable or
unrealistic, we’ve just shown you why it is possible these levels could be
reached before the end of 2019 or in 2020.
If you have not grasped the reality of what is likely to unfold over the
next 6 to 12+ months in the global markets and that precious metals are the
setup of the decade, then pay attention to the fact that gold and silver are
poised for moves ranging from 40% to 240% over the next 12+ months depending on
the scale and scope of this move.
Our current objectives for the ratio levels
are still 55 to 65 within this next move higher where Gold will target
$1750. Beyond that level, we’ll have to
update you as the price continues to explore new highs.
CONCLUDING THOUGHTS:
In short, don’t miss the trade of the
decade. These opportunities for skilled technical traders over the next 16+
months is incredible. Huge price swings, incredible trends, big rotations
and we could see nearly 300%+ profits to be had if you know what to trade and
when. These types of opportunities are perfect for skilled technical
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This bear market for stocks and the new bull market for metals has been a
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Be prepared for these incredible price swings before they happen and learn
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