There is often an incredible phenomenon after gold outbreaks, beware of silver

In 2005, silver rose more than 100%; in 2009, silver rose nearly 400%. So what about 2020?

Due to various global economic problems, geological tensions, etc., as gold soars, it is easy to understand why traders and investors may ignore silver. But analysts see that silver is brewing big moves. The author of the analysis below is Chris Vermeulen of FX Empire, who has more than 20 years of technical analysis and trading experience.

以来 Since this year, despite the explosive market news, silver has indeed not started to fluctuate like other precious metals. During the US-Iran conflict last week that caused gold to soar by $ 70, silver failed to keep up with gold. Since 2016, gold has risen more than 45%, palladium has risen more than 350%, and silver has risen only 29%. The gold-to-silver ratio is currently 86.7, which is very close to its highest level in 25 years.

Historically, silver generally rebounded within 6 to 12 months after the price of gold began to rise. The largest outbreak of the gold-to-silver ratio generally occurs when the price of gold rises 30% to 60% faster than silver. In other words, when there is a significant difference in the relative price of gold and silver, silver will rise higher, which will cause the gold-silver ratio to fall.

At present, the relative price of gold to silver is over 200%. Considering this fact and the recent poor performance of silver, researchers believe that silver is establishing a large-scale bottom pattern in preparation for launching an explosive uptrend.

The research team compiled the chart below to illustrate the upside potential of silver. This monthly chart highlights the link between the gold-silver ratio (dark blue), the price of gold (gold) and the price of silver (light blue) over the past 20 years.

As shown in the figure, each time gold breaks the sideways pattern and starts to rise sharply, silver will rise at an alarming rate within the next 5 to 12 months.

For example: in 2005, silver rose more than 100%; in 2009, silver rose nearly 400%. So, can silver rise 100%, 200%, 300% or more in 2020?

The current trend of gold and silver is almost the same as before, that is, the price of gold has risen because of market concerns about the economy or the global situation, resulting in a huge gap between gold and silver prices. Research suggests that silver is building a strong bottom pattern for the skyrocketing, which may be an incredible opportunity for experienced traders.

Ford Austin

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