Technical analysts continue to closely watch the gold/silver price ratio to get a feel for investor sentiment on precious metal and where the trend may be heading.
Silver prices recently moved above the 200-day moving average but fell hard in Wednesday’s sell-off as Federal Reserve Chairman Ben Bernanke threw cold water on QE3 speculation. [Gold, Silver ETFs Tumble]
“Silver is now up a whopping 30% year to date, making it the best performing precious metal so far in 2012,” Edward Meir, senior commodities analyst with INTL FCStone, said in a WSJ.com report. [Silver ETFs Advance as Metal Retakes $36]
Traders consider silver moving past its 200 day-moving-average as a signal of a change in the market trend. The ratio between gold and silver prices is at 48, the landmark level that gold buyers look for before purchasing silver, said Meir. The gold-to-silver ratio has hit its lowest level in five months, reports Myra Saefong for MarketWatch.
Silver prices are rebounding thanks to the better-than-expected U.S. data reports, sparking more interest in the metal due to its industrial applications. A slightly weaker U.S. dollar has also been favorable for gold and silver prices. [Silver ETF at Five-Month High]