If gold is going to explode higher, the move should start today or tomorrow.

As I’ve previously noted , during inflation-driven bull markets in gold, gold miners typically outperform the precious metal. For this reason I like to track the gold miners-to-gold ratio (GDX: $GOLD).

When gold miners outperform gold, this ratio rises. When gold miners underperform gold this ratio falls.

As you can see in the chart below, this ratio has fallen to test MAJOR support (green line). It should bounce here, which would mean breaking its recent down trend (blue lines). This would mean a period in which gold miners DRAMATICALLY outperform gold.

Another key feature of bull markets in precious metals is that silver outperforms gold. With that in mind, I also like to track the silver-to-gold ratio ($SILVER: $GOLD).

When silver outperforms gold, this ratio rises. When silver underperforms gold this ratio falls.

Right now, this ratio has fallen to test key support (green line). We should see a bounce here that finally breaks this triangle formation (blue lines) to the upside.

This would mean a major move that features silver dramatically outperforming gold as both precious metals skyrocket.

Again, if this move is coming, it should be within the next 48 hours. If it doesn’t we’re going to have a deflationary drop that could be quite painful.

Best Regards,

Graham Summers
Editor, Money & Crisis