The relationship between silver and the Dow is such that significant Dow peaks are often followed by significant silver rallies. It is for this reason that silver can provide a great opportunity to bank Dow profits and even grow them much bigger.
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The Dow has been in a massive bull market since 2009, and it has significantly outperformed silver since at least 2011. However, there is now an indication that silver is likely to significantly outperform the Dow.
Below is a long-term Silver/Dow ratio chart:
On the chart above I have indicated two massive bullish wedge-type formations. Price broke out of the first wedge in 2011 (when the silver bull market started). The current wedge, which is much smaller, is still waiting on a breakout.
- A breakout could signal the second part of the bull market since 2001, and this could mean that silver will significantly outperform the Dow for many years to come.
- A similar pattern on the silver chart has already broken out in 2016, and this is an indication that this pattern will likely do the same.
- Furthermore, the smaller wedge represents the first “impulse and revert to breakout move” of the larger wedge. This indicates that we are likely to see a big move that will take this ratio to all-time highs over the next years.
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Gold & silver bulls want to see this ratio heading higher but, since 2011, the opposite has been happening. The large decline…has this key ratio testing important support, where a long-awaited opportunity could be near.
Last month and this month the ratio is pushing higher and is now attempting a breakout at (2). A push higher by this ratio is a positive for both Silver and Gold.
A breakout here would “spring” silver much higher, and likely carry gold with it. Precious metals investors need to be watching this ratio here!
Silver appears to be in the very late stages of its Head-and-Shoulders bottom and, with the price still not far off the Right Shoulder lows, we are at a very good point to continue accumulating silver investments.
Silver prices have risen exponentially for the past 90 years as the dollar has been consistently devalued. Expect continued silver price rises.
Supply and demand trends are clearly poised to continue tightening the silver market and when the next crisis hits the silver price will be significantly impacted by this trend. It may not happen this year, but the 20,000-foot view of this market says a crunch is on the way. It’s supply/demand 101.
Frustrated by the comatose silver price? Tired of it going nowhere and being held down? Well, history has a message for you: This trading behavior is normal. Furthermore, similar scenarios from the past say the next price explosion is on the way.
A collapse of the U.S. dollar is inevitable. The U.S. Dollar Index has been bouncing off of four-year lows for the past several weeks but this cannot last much longer with a global trade war and U.S. equity correction looming….The U.S. dollar and fiat currencies are in trouble, hinting that gold and silver prices could again go screaming higher…[as] the two still generally trade inverse to each other and, while gold is perhaps the safest way to hedge against a falling dollar, the most profitable option is silver.
The moves in gold and silver will be explosive. The time to own physical gold and silver is today and not when they move to new highs. Both metals are at inflation adjusted historical lows and the downside risk is minimal. Also, they probably are the most undervalued of all assets currently.
It’s Economics 101. Price works to balance supply and demand. Limited supply causes higher prices; higher prices help curb demand…[and] that equation is playing out right now in the silver market. Mined silver supplies have been drying up over the past few years, while silver prices have climbed 20% in the same time frame…
Silver has often rebounded nearly 100% within 12-15 months after bad and long bear markets. History says Silver is ripe for a similar move over the next 12 to 18 months.
Silver is now rarer than gold and will be for all of eternity. From this point forth we work from current silver production alone and, from this point forth, demand will outstrip production without exception. Can you imagine what that means for the future price of this, indeed, precious metal? Forget about the popular expression: ‘Got gold?’ The much more important – and potentially more profitable – question to ask these days is, ‘Got silver?’