Could Gold Bugs Rally Big Again?
Chris Kimble | Apr 10, 2014 10:37AM ET
Twice in the past 15 years the Gold Bugs/S&P 500 ratio was oversold (2001 & 2009). But then the Gold Bugs index rallied in excess of 150%.
The ratio remains deeply oversold at this time and the Gold bugs index (ARCA Gold BUGS) could be on support, forming a bullish inverse head-&-shoulders pattern. The current fish-mouth spread between the two is now the widest in the past 14 years.
I have shared with premium members that the Silver-Gold ratio is on a 24-year support line and has created another bullish falling wedge on support.
In my opinion, this ratio needs to breakout to the upside for the Gold Bugs index to take off.
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