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Historically, when the Gold vs. Silver ratio reaches an extreme level, and precious metals begin to rally, a reversion within the ratio takes place, which represents a revaluation process for silver prices compared to gold prices. This typically means that the prices of Silver will accelerate to the upside as the price of gold moves higher – resulting in a decrease in the ratio level and we expect that, for every drop of 5.0 points in the gold/silver ratio, the price of Silver should increase by 6.5% to 7.5% to the price of Gold.
…I believe a reversion process has already begun…[and that it] is about to explode as a dramatic revaluation event unfolds over the next 12+ months. This process will become more evident to…as the price of Gold continues to rally towards the +$1,750/ozt. level and as the price of Silver explodes higher in larger and larger advances.
… Our previous analysis suggested Gold will attempt a move to levels above $1,650 to $1,700 on the next breakout move higher [and] this…move will expose the price reversion event…[and] the expected Silver price advantage for all traders going forward.
Gold/Silver Ratio – Silver Price vs Ratio Level
We put together this reference table to assist all traders in understanding just how important this move could be to them. This reference table shows the current Gold/Silver price levels (in GREY) as the ratio levels change from 88 to lower levels.
- If the price of Gold were to stay at the same $1,426/ozt. level while Silver rallied to prompt an 82 or 77 ratio level,
- then the price of silver would move from the current price of $16.19/ozt. to $17.39 or $18.52 in order to reflect this decreased ratio level. That represents a 7.5% to 14.3% price increase.
- If the price of Gold advances to $1,650 or $1,750/ozt. while the ratio level drops to the 82 or 77 ratio level (because Silver advances fast[er] than Gold),
- then the price of Silver would move from the current price of $16.19/ozt. to $20.12 to $22.73. That move represents a 24.2% to 40.3% price increase in Silver when Gold increased only 15.7% to 22.7%.
- If the price of Silver advances even faster than our “what if” scenario, above, and Gold continues to advance as we expect,
- then the increased price reversion process taking place in Silver as a process of this revaluation event could result in a 70% to 110% fast[er] price advance in Silver than the price advance that takes place in Gold.
We believe the next upside price leg in Silver will target $19.50 to $22.75/ozt. This target range supports the highlighted area on our Ratio table (below). In other words, we believe the ratio level will attempt to quickly move toward the 70 to 77 level as Gold prices rally over the next few months. This would push silver up into the $22.50 to $25/ozt. price level very quickly.
- If Gold were to rally above $1,950/ozt. on an extended upside price advance before August or September,
- then we believe the reversion process would become extremely hyperactive in nature and the price of Silver could push well above $29~34 per [troy] ounce – may be even higher…
- If Gold were to move up above $1,750/ozt. ( (which is our expected target for the next leg higher) and the Gold/Silver ratio was to drop below the 55 level
- then the expected target price for Silver would be somewhere between $30 and $40/ozt. – more than 100% higher than the current price of Silver – and it could go well above $50/ozt. over the long run.
If you think $50/ozt. is unimaginable or unrealistic, we’ve just shown you why it is possible these levels could be reached before the end of 2019 or in 2020.
If you have not grasped the reality of what is likely to unfold over the next 6 to 12+ months in the global markets and that precious metals are the setup of the decade, then pay attention to the fact that gold and silver are poised for moves ranging from 40% to 240% over the next 12+ months depending on the scale and scope of this move…
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