Sunday, February 26, 2012

Silver/Gold Ratio Breaks Below 50:1

Live 24 hours silver chart [ Kitco Inc. ]Silver is up .10 from Friday's NY close to $35.62, continuing to hold all of last week's impressive gains.  The big news tonight is the silver/gold ratio, which as just broken below 50:1 for the first time in months.

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.

( closes in 18 hrs. 41 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
Gold Charts  GOLD 02/26/2012 22:34 1774.90 1775.90
Silver Charts  SILVER 02/26/2012 22:33 35.51 35.62

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.