Silver Intermarket – Follows gold, yet to retrace 23.6% of 2011 high – 2015 low

Silver topped out in April 2011 and was followed by Gold, which topped out in September 2011. That was the time when gold prices used to follow Silver.

However, the relationship reversed in 2013 and has been pretty much intact till today. Gold and silver both bottomed out in December 2015; however, gold quickly rose to near $1380 (38.2% of 2011 high – 2015 low).

Despite Silver’s more than 42% rally this year, the semi-precious/semi-industrial metal, is still lagging gold, given the prices have not even retraced 23.6% of the slide from 2011 high to 2015 low.

If we were to believe the technical correlation between gold and silver, then it is safe to assume that rally in Silver is not done. Prices could head higher to $22.22 (23.6% of 2011 high – 2015 low). The 38.2% retracement is seen at $27.50/Oz.