Gold Is on a Tear. Is Silver About to Catch Up?

3.4.22 - Gold's on a Tear. Will Silver Catch Up?

Gold last traded at $1,961 an ounce. Silver at $25.65 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on safe-haven buying amid rising uncertainty. U.S. stocks headed for their 4th down week as the Ukraine war overshadowed an upbeat jobs report.

Barrons---"Gold and silver often trade in sync. And after lagging gold for the past eight months, silver appears to be trying to play catch-up. Will it be successful?

For the past 18 months, spot silver has traded between $22-$30 an ounce. It has finally progressed from a 'declining phase' to a period of 'base-building.' This is where the price of a security trades within a well-defined narrow range after being dragged lower for months....

What is encouraging is that volume flows have surged more quickly than silver's price has. Volume flows are computed by adding the day's trading volume on days when silver closes up and subtracting the day's trading volume on days when it closes down. Because volume leads price, it should be only a matter of time before silver's price strengthens.

The weekly chart of the silver/gold ratio (silver divided by gold)...for the past 5 1/2 years has formed a rounding base. It is encouraging that in the latest pullback, the ratio held exactly at the 200-week moving average, which defines the long-term price trend. But before silver can outperform gold meaningfully, it must be able to overcome formidable resistance."