September 26, 2009 – The precious metals began a correction last week, which was fueled by gold’s inability to penetrate resistance above $1000 after several determined attempts.
I am encouraged by the relative performance of the gold/silver ratio. Though the ratio has bounced, which is to be expected in any correction, my recommended stop-out point has not been hit. I like to see good relative strength in the ratio like this during a correction.
The ratio closed on Friday, September 25, 2009 at 61.7. If it remains below 62.2 (basis the daily closing price of gold and silver on the New York Comex), I would then expect this current correction in the precious metals to be short-lived.
Let’s watch the ratio for a day or two, or perhaps through month-end. Its performance during this period will I expect signal whether the correction in the precious metals is ending. See Trading.
My objective is to share with you my views on gold, which in recent decades has become one of the world’s most misunderstood asset classes. This low level of knowledge about gold creates a wonderful opportunity and competitive edge to everyone who truly understands gold and money.
