Silver ratio charts (28 January 2012)

The gold/silver ratio broke down in favor of silver. I have a specific initial target of 2166 (gold) and 69 (silver) in mind. Is it possible that they will go beyond those prices this year? Yes, it is.

Why silver is initially going to at least 69:

Silver to DJIA ratio:

Finally I want to look at the relationship between silver and Silver Wheaton (SLW). It revolves around the neckline of the head & shoulders bottom that formed at 0.925. When silver is below this level, it means that SLW is priced above silver in anticipation of higher silver prices in the near future. The chart is currently forming a descending triangle. A breakout below 0.925 would mean SLW is rising in anticipation of a higher future silver price.

Disclosure: Long physical gold/silver.

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