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
Silver remains below its all-time high, while gold is trading near record levels. 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 enjoyed strong support in recently, but while gold is close to its 2020 all-time high of $2,075, silver remains well below its record high. It touched $49.81 in 2011 and has not since approached that level.
This year, 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 trading near its all-time high, which is bullish for silver. Meanwhile, the gold:silver ratio has strong support in the 78—80 range. Many traders use the gold:silver ratio as an indicator for their decision-making.
The gold:silver ratio is a numerical indication of how many ounces of silver can be bought with one ounce of gold, and it has technical levels that serve as entry points. If the gold:silver ratio settles below 78, it could gain strong downside momentum and move toward yearly lows around 75. This is bullish for silver.
Silver reached its all-time high when the gold:silver ratio declined towards the 32 level. 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.