Gold Looks Good But The First Correction Will Tell Something More About This Market

As usually - the nature of any big move is defined by corrections. Most recently gold, silver and the entire precious metals market have made a huge move up. Many people are excited but, in my opinion, the best way to say something about the nature of any big move is the first correction against a new trend.

It seems that we are going to see this first correction soon. Looking at the price of gold, represented by GLD, one can spot that last week the players were less interested in opening new long positions in gold:

That is why I think the prices of gold are close to their first correction.  

What is more, during bull markets in gold it is silver that is a stronger metal than gold itself:

As the chart shows, in the long-term (since April 2011) gold has been stronger than silver (although since July 2015 both metals go neck and neck, more or less). I believe that a real bull market in precious metals will start when a ratio of gold to silver falls below 70. Today we are quite far from that point.