Are Precious Metals Ready To Break Out? Two Ratio Charts To Watch

Gold has been in a persistent downtrend since 2011. Failed rallies have added up and it’s taken its toll on precious metals bulls.

2017 has once again seen precious metals rally… and we are back at a key resistance level.

Today, I want to share 2 interesting ratio charts that provide deeper insight into what’s next for Gold (NYSEARCA:GLD). The first chart looks at Gold vs Silver and the second chart looks at the junior gold miners vs the senior gold miners.

What precious metals bulls want to see is “risk on”. What does risk on mean?  Higher beta. Typically, silver outperforms gold when precious metals are in a strong uptrend. And smaller gold miners should be outperforming larger gold miners.

In the first chart below, you can see that gold has been underperforming silver during this latest run.  It’s sitting on key support and bulls want this support to breakdown, with silver leading the rally.

The second chart looks at the junior miners (NYSEARCA:GDXJ) vs senior miners (NYSEARCA:GDX). The junior miners are outperforming in 2017, but the ratio is up against key resistance. Precious metals bulls want to see a breakout here.

Pay close attention to these charts. They should give investors a good idea if gold (and precious metals) are truly ready to breakout.  Thanks for reading.

Twitter:  @KimbleCharting

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.