If gold is going to explode higher, the move should start today or tomorrow.
As I’ve noted preciously, during inflation-driven bull markets in gold, gold miners typically outperform the precious metal. For this reason I like to track the gold miners to gold ratio (GDX: $GOLD).
When gold miners outperform gold, this ratio rises. When gold miners underperform gold this ratio falls.
As you can see in the chart below, this ratio has fallen to test MAJOR support (green line). It should bounce here, which would mean breaking its recent down trend (blue lines). This would mean a period in which gold miners DRAMATICALLY outperform gold.
Another key feature of bull markets in precious metals is that silver outperforms gold. With that in mind, I also like to track the silver to gold ratio ($SILVER: $GOLD).
When silver outperform gold, this ratio rises. When silver underperform gold this ratio falls.
Right now, this ratio has fallen to test key support (green line). We should see a bounce here that finally breaks this triangle formation (blue lines) to the upside.
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Chief Market Strategist
Phoenix Capital Research