| R1 | 59.06 |
| R2 | 59.22 |
| R3 | 60.49 Spike Sept '11 |
| S1 | 56.90 |
| S2 | 54.70 |
| S3 | 52.75 |
| S4 | 51.35 |
| S5 | 50.12 |
| S6 | 47.48 |
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Analysis
- The run-up in the ratio since early March highlighted the risk-off attitude towards bullion, but that now seems to be changing with the ratio turning flat in recent weeks.
- The stochastics are however, starting to fall so we wait to see if the ratio follows it lower.
- If it does, then that would suggest that silver prices are rising faster than those of gold and that in turn may suggest investors are jumping into silver as a cheaper proxy for gold.
- Away from the technicals - we note that in recent days and weeks that buying of bullion ETFs has picked up, as has the net long fund positions on gold and silver.
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Conclusion
The scene looks ripe for further gains in bullion prices - a pick-up in buying of silver would suggest bullish sentiment is getting stronger.
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All trades or trading strategies mentioned in the report are hypothetical, for illustration only
and do not constitute trading recommendations.
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