XAG/XAU has been testing a long term trendline since 90's and has now made an interesting reversal pattern which I like to call it as 'Triangular Reversal' at a major trend line support. In other words Silver is heading for a major reversal and is more likely to revert back to 1.75 with a strong possibility of 1.90 on a longer term basis against Gold. My analysis is based on few stat arb models which I have run at my end and traditional methods like the one posted here. In short Long XAG/XAU ref rate 1.58 has a potential to gain 15-20% in about years time. Fundamental factors could play a role as US growth gathers momentum along with other western countries like UK . ( Not to mention the positive spillover effects of US growth on EM countries.)
Medium-Long Term Play Guys
Best of luck traders !
I've rarely seen XAG/XAU charts arond, and when I do I see it as a sort of visual comparison of whether to express like a comparative weakness/strength between the two.
ReplyDeleteYou mentioned fundamentals - what would drive the value of silver up/down vs gold? Super curious!