Gold investors have enjoyed a strong start to 2018.
After a brief pullback into early February, the shiny metal has charged higher once more.
The question now: Is a major breakout on the way for gold and precious metals bulls?
Looking at the chart below, you can see that a strong base has been built in both Gold prices and the XAU Index (Gold and Silver Miners). These bases look very similar and have take a few years to build… so IF both breakout at the same time, it would be rather bullish for precious metals.
This is a big spot for metal heads!
At the same time, Gold bulls need Silver to play along. Silver offers a higher beta and is typically seen as “risk on” when outperforming.
Currently, the Silver/Gold ratio is testing a confluence of price support: its 27-year rising channel and 2003 & 2008 price lows. Bulls need to see this support hold, followed by a strong move to the upside. Stay tuned!
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