When asked about buying gold here, after years of consistently talking about the bullish case for it, I answer the same way-
I am now more interested in the gold-to-silver ratio and potentially buying more silver.
In 2022, the gold-to-silver ratio peaked at 95.420.
If you recall, 2022 was the year the Fed aggressively raised interest rates.
By the end of October that year, it became clear that the Fed would pause.
The stock market bottomed and then rallied by spring 2023.
When the gold-to-silver ratio peaked, what happened to the price of silver?
Note that in September 2022 the ratio peaked, and silver prices bottomed.
Points of interest in this chart.
- In September 2022, silver broke out of the July 6-month calendar range high
- Real Motion (red dots) showed a bullish divergence as the dots cleared the moving averages, while price had not.
- When SLV broke the moving averages, not only did the ratio confirm it had peaked, but silver went on to rally from those September 2022 lows to where it is now.
Now, let’s compare this action to April 2025.
IF today was the peak in the gold-to-silver ratio, we could assume that silver might be a buy.
We could assume that the Fed will pivot and lower rates at some point
We could assume that gold takes a rest
We could assume that the market might be trying to bottom.
But is it the peak?
If Wednesday, the ratio closes below 103, I am willing to say the gold-to-ratio has peaked.
What does that mean for silver?
Silver is in a bullish phase. The 50-DMA is the closest support.
Real Motion has yet to catch up to price, so we will wait for the red dots to clear the 50-DMA.
Silver is well above the January 6-month calendar range high.
Silver could be very close to having another leg up.
Now, we are looking at a new scenario.
After 4 cuts last year, and a current “stay the course” message by the Fed, perhaps that is ready to shift?
As for the market, 4800 could be the low.
The market could chop and base for months.
We won’t know if the bottom is in until SPY gets back over 5800.
I’d rather bank on the potential silver setup.
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
S&P 500 (SPY) 520 should hold if good, and 530 next hurdle
Russell 2000 (IWM) 180 pivotal-193 resistance
Dow (DIA) 400 resistance 380 support
Nasdaq (QQQ) 440 should hold if good 460 resistance
Regional banks (KRE) 50 should hold if good
Semiconductors (SMH) 165 key support 195 resistance
Transportation (IYT) A move over 60 gets interesting
Biotechnology (IBB) 120 pivotal
Retail (XRT) 64 key to hold. 69 resistance