Why Silver Is the New Gold: Opportunity for Sustainable Upside Momentum
The comments below are an edited and abridged synopsis of an article by Vladimir Zernov
While gold is close to its record high of $2,075 reached in 2020, silver remains well below its record high of $49.81 (April 2011). If the gold/silver ratio drops below 78, it could give silver a sustainable bullish trend and potentially push it towards multi-year highs.
Silver has a chance to gain sustainable upside momentum as traders focus on the problems of US banks and search for safe-haven assets. Gold is already trading near its all-time high, which is bullish for silver. Meanwhile, the gold/silver ratio has settled near strong support in the 78—80 range.
While the gold/silver ratio is simply an indication of how many ounces of silver can be bought with one ounce of gold, it has technical levels that serve as entry points. If the gold/silver ratio settles below 78, gold will likely gain strong downside momentum and move toward yearly lows at the 75 level. This scenario is bullish for silver.
Silver reached its all-time high when the gold/silver ratio declined towards 32. While this was an extreme development, the gold/silver ratio has plenty of room to move lower if the right catalysts emerge. As gold gets more expensive, investors may focus on silver, and push it toward multi-year highs.
