With gold currently trading in Asia at $1775.90 and silver at $35.62, the silver/gold ratio has fallen to 49.86: 1.
If gold and silver are successful at breaking significant resistance in the next few weeks at $36 and $1800, look for this ratio to again tighten significantly over the coming months as silver continues to out-perform gold.
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Monday's session will be critical for silver, as a 2nd daily close above $35 will likely bring alot of the money sitting on the sidelines since early 2011 back into the silver market. Once $36 is taken out, there is no significant resistance to $40 due to the September gap down.
It seems hard to believe that only 2 months ago during the last week of December silver hit $26 and the level of bearishness among even die-hard silver bugs was at spiritual levels. Two months and a 35% rally later, excitement is flowing back into the silver market. Keep that in mind during the next severe smash, and buy into the pain and your own fear.