The precious metals arena has reached important junctures for both silver and gold. Yesterday, we highlighted an important test of support for silver.
Today, we look at a monthly chart of the Gold-U.S. Dollar Ratio and highlight a similar test of support.
As you can see, this important ratio for precious metals bulls looks to have double topped at (1). As well, a monthly bearish reversal pattern took place at those highs last June at (2).
2013 Deja Vu For Gold-U.S.-Dollar Ratio?
After the bearish reversal, the gold-U.S.-dollar ratio made a low early this year and headed higher. But it failed to make new highs (creating a lower high) and headed lower once more.
Now, the ratio is testing important support at this year’s low, marked by (3)… this is also the same support area that gave way back in 2013 leading to a plunge in the price of gold.
Gold looks to be hanging by a thread at (3). If support breaks, look out.