Gold and Silver are Breaking Out…..
- Posted by Greg Harmon
- on September 7th, 2012
…..in Euro terms. Remind you of anyone? Well it is true. The ratio of Gold ($GLD) to the Euro ($FXE) is breaking a 13 month symmetrical triangle higher, as shown in the chart below. Consolidating the break higher at 1.32 it has a target from the pattern break to 1.51. If that move
happened solely from a move in Gold prices that would mean a move higher to about 1960 in the price of Gold. The indicators shown, Relative Strength Index (RSI) and Moving Average Convergence Divergence indicator (MACD), also support a move higher in the ratio. And the same thing is showing up in the ratio chart of Silver ($SLV) to the Euro, below, only this triangle is 6 months longer. The target for this pattern is to a ratio of 0.385 or over 50% higher, which would bring Silver back close to $50 if that solely drove the move. This chart looks like it needs a
consolidation first though with the RSI in overbought territory. $1960 for Gold and $50 for Silver. Wow! But of course these ratios can reach their targets by changes in the Euro as well. The thing is that as discussed last week in Euro and Dollar Are Focused on Draghi not Bernanke the Euro is moving higher, working against the ratio. Are you ready for new all time highs in these metals?
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
Dragonfly Capital Updates
- ♫ McDonald’s is My Kind of Place … ♫
- Premium Earnings 5-21-13
- Checking the Gold to Oil Ratio
- Jumping into the Big Oil Gush
- New Website Tab – SPY Sentiment
- Premium Earnings 5-20-13
- Top Trade Ideas for the Week of May 20, 2013: Bonus Idea
- Top Trade Ideas for the Week of May 20, 2013: The Rest
- Top Trade Ideas for the Week of May 20, 2013: The Rest Premium
- Top Trade Ideas for the Week of May 20, 2013: The Best