Here is a blow up of the only three year period (beside right now) since the gold window was closed (in 1971) that the GSR has been above 90. It shows that the GSR flitted between the low 80s and low 90s for a 2-3 year period. Other than one brief several month spike to near 100 in late 1990, it never got above 92 and change:
Just to provide a little perspective if and when we move up from here...
I have absolutely no idea what is coming, but I'm going to form an opinion just the same. Two assumptions:
1)Silver's absolute current day bottom is about $14, give or take a few cents. This seems to be a post 2011 hard stop. I could be wrong here, but I won't believe so until I see it happen.
2)Gold's 'Maginot line' these days seems to be in the $1360-80 area. Gold has tried numerous times the past five or six years, unsuccessfully so far, to get above this number. It is widely felt that when it crosses this line a quick advance up into the $1500 level is likely, due to the lack of resistance between $1380 and $1500. At this point gold should catch the attention of average Joe investor. When this happens, silver (poor man's gold) should start to see increased interest from the public and receive a proportional boost. Silver is a smaller market than gold, so an increase of interest on the part of a similar proportion of the population should catapult its price to a greater extent proportionally than gold. It is at this point that the GSR should come back down to earth.
All this is pure guesswork, but even at gold $1320 and silver $14 we are still only at 94/95. Getting up over 100 would take a helluva squeeze. I don't think we are going to see it. Then again one quick look at my incredibly shrinking account fund will tell you that I have been wrong before... many times.
I'm a technical lightweight but I can help with the basics. When looking at a chart, look to your left. That represents what the price action has been. Also remember that on the way up when price resistance gets breached it becomes support. Similarly, when price falls through support that support level then becomes resistance. In 2010 the price of gold was on the move. It eventually rose to over $1800. Following this high it flopped around between the $1500-$1700 area for a year or two. The bulls kept waiting for the next leg up. Then, in spring of 2013 the bears really started to turn the screws. The price of gold started to rapidly fall below support at $1500, culminating in the nearly $100 drop over a long weekend in April 2013. Following this bombing gold tried to bounce back, failing to break through the new resistance in the high $1300s. The next five to six years, leading up until now, have been a series of attempts for gold to break through that resistance in the high $1300s. If and when we get through this significant resistance, say at the $1380 level or so, there is really no significant resistance again on this chart until we get over $1500. What that means is, it will take a lot of market energy to break through toward $1400, but when it does it should be relatively easy for the price to rise up above $1500 or so.
They've been pounding down metals all day until we're finally in the negative for the day and still heading south! I think its hilarious how they blatantly manipulate the markets with impunity! In the meantime I'll keep buying the dips!