Gold-to-Silver Ratio (AUG) Close to Breakout

We will update the Elliott Wave outlook of the ratio. It’s been pretty sideways in the last few months, but it is likely to break sooner or later. To refresh, when the ratio goes lower, the price of both the underlying metals (Gold and Silver) will go up. Silver will outperform Gold both to the upside and downside. When the ratio goes lower, the price of Silver will go higher faster and outrun Gold.

Gold-to-Silver (AUG) Daily Elliott Wave Chart

Daily Elliott Wave Chart of Gold-to-Silver ratio above shows that the ratio has been trading sideways in the past few months. The top on March 2020 was a capitulation move during the Covid 19 scare. Since then the ratio moved lower as a 5 waves impulse ending wave a at 62.51. It then rallied higher in a 3 waves zigzag ending wave b at 96.58. The ratio has since turned lower but it has not broken below wave a and continued to trade sideways until now. We are looking for a breakout soon. If we can close below the ascending trend line from wave a, as well as breaking below previous wave 1 at 78.33, that will signal the next leg lower in the ratio has started. That will also mean both Gold and Silver price will rally. We should expect the price of gold and silver to continue higher in the second half of 2023 as the ratio breaks lower.

I like this analysis. I have been “GSR” investing since 2010. My timeframe is a little longer. We started accumulating gold in 1988! Our longer term GSR strategy is like this : At GSR = 30 all in gold, at 50 it will be a 50/50 share of gold and silver by value. At 80+ it will be all in silver. We are in a long term transition at the moment of property versus precious metals. Your analysis is very relevant to our 2023/2024/2025 plans.