In one of my last posts I spotted divergence between the silver / gold ratio and the gold itself. In conclusion I stated that there was a chance for higher prices of gold because such a pattern (silver / gold ratio going up) was an indication of an incoming reversal in the gold trend.
Today the pattern materialized:
The line marked in red shows the downward trend in gold prices accompanied by the line marked in green (the upward trend in silver / gold ratio). Divergence may be easily spotted.
Then, today, both metals exploded (gold gained 1.5% while the price of silver went up by 2.7%). Of course, some may say it was due to no hike in interest rates. Maybe they are right - I do not know what factors were driving prices today. All in all, the facts are clearly visible - we have seen higher prices of gold and silver.
Now, I think that the ultra short term players should closely watch what happens tomorrow, the day after today's enthusiasm.
Lastly - I want to remind my readers that the first issue of my newsletter should be dispatched at the end of this week. Those interested, please, subscribe. It is free.