Metals bulls want to see this ratio heading higher and since 2011, the opposite has been happening. The large decline over the past 7-years has this key ratio testing important support, where a long-awaited opportunity could be near.
The ratio has found line (1) as support a couple of times over the past decade. It hit this support line of late and is now working on a breakout of 7-year falling resistance at (2). Historically when this ratio is moving higher, it is sending a positive message to both Silver and Gold.
Below looks Silver Futures over the past 7-years-
Silver has been trading in a very narrow range for the past couple of years, as it is forming a narrowing pennant pattern.
It is now testing 2-year and 7-year break out levels at the same time at (1). If Silver breakouts out at (1), it should attract buyers and push Silver higher.