All Time High on Silver - What lies ahead?

Silver hit a new all-time high last week after breaking out of a cup-and-handle pattern. Friday’s strong green candle closed near the day’s high, showing solid momentum. Based on this breakout, the charts point to another 8% upside. Daily chart below.

Gold, though not so strong as silver, is setting up well to break out of a 1-2-3 bottom pattern, possibly as early as next week. Daily chart below.

Notice that Silver has considerably outperformed gold in the past few weeks. Will this continue?

Given below is an interesting monthly chart of gold silver ratio. It has broken below a long term trendline of 15 years to 74.5. The lower the ratio, the more expensive silver becomes compared to gold. Thus, a break below a long term trendline, if it holds, would mean that silver continues its outperformance against gold.

So, should one be overweight silver? The charts definitely point in that direction — but as always, only time can tell.

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