Silver is getting very close to a mania phase based on signals from the Dow/gold ratio previously presented. Furthermore, since it is normal for silver to lag gold’s performance, and given that gold has performed so well over the last couple of years, it is expected that we would likely see an even better performance by silver over the coming years.
Here is a long-term silver chart compared to a long-term Dow/gold ratio chart:
(Click to expand)
On the silver chart (the top chart), I’ve highlighted the significant Dow/gold ratio peaks with a blue line. In every case, silver made a significant bottom some years after the Dow/gold ratio peak. These were signals for the (then coming) silver bull market.
Once in the bull market, significant silver peaks occurred within 8.5 years (marked in red), as measured from the Dow/gold ratio peak, with the Great Depression silver peak occurring the soonest (6 to 7 years after).
It has now been 6 years and 8 months since the Dow/gold ratio peak of October 2018. In other words, there is still about 1 year and 10 months (22 months) left before we get to the 8.5 years since the Dow/gold peak, before when a peak in silver could occur based on the previous times highlighted above.
Given that silver actually rallied on a sustained basis for at least two years before each of those peaks (pointed out above), silver could likely rally for most of the coming 22 months if the current setup continues to mimic the previous ones.
When considering that we are probably very close to monetary reform, the rest of this decade will certainly make for interesting times.
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Editor’s Note: This article was first published at Hub Moolman’s website. For those who see value in chartist analysis, I recommend his by-subscription silver newsletter.
