This post was originally published on this site
(Source: TC2000.com)
Just over two months ago, we had concerning readings for the silver/gold ratio and the silver/S&P-500 ratio, with the latter in free fall and the former looking like it would make a new 1-year low and break below its key moving average. However, the bulls stepped up exactly where they needed to for silver, holding the critical $21.50/oz – $22.00/oz support zone and recently breaking out of a short-term downtrend. As the chart above shows, this allowed the silver/gold ratio to make a higher low relative to Q4 2020 levels, and it has also contributed to the silver/S&P-500 ratio not making a new low and continuing to hold above its 2018 lows, in the depths of that violent bear market. Generally, outperformance in silver vs. the gold price suggests that both metals remain healthy and that violent pullbacks should be treated as bull market corrections, not the start of new bear markets.
