It's Happening. Silver is Quietly Beating Gold

Key Concepts

• Gold to Silver Ratio Breakdown: A significant event where the ratio of gold's price to silver's price has declined, indicating silver is outperforming gold.
• Positive Divergence: A technical indicator where one asset (e.g., silver) makes a higher high while another related asset (e.g., gold) does not, suggesting strength in the former.
• GDX/GDXJ/SILG: Stock market indices representing gold miners (GDX), junior gold miners (GDXJ), and silver miners (SILG).
• Triangle Consolidation: A chart pattern in technical analysis that can precede a significant price move.
• Analog Charts: Charts that compare current price action to historical patterns to forecast future movements.
• All-Time High Breakout: When an asset's price surpasses its previous highest point.
• Secular Bull Market: A long-term upward trend in a market.
• Ascending Triangle Pattern: A bullish continuation pattern in technical analysis.
• Cup and Handle Pattern: A bullish continuation pattern in technical analysis.
• Advanced Decline Line: A technical indicator that measures market breadth by showing the cumulative number of advancing stocks versus declining stocks.
• Daily Gold Premium: A subscription service focused on identifying high-potential junior mining stocks.

Precious Metals Recap: Week Ending December 5th, 2025

This recap focuses on the precious metals market performance for the week ending Friday, December 5th, 2025, highlighting silver's outperformance against gold and analyzing key technical indicators and historical patterns.

Weekly Market Overview

• Silver's Strength: Silver has demonstrated a positive divergence, making a higher high while gold has not yet achieved this. This suggests silver is currently leading the precious metals market.
• Mining Stocks Performance: Gold and silver mining stocks (represented by GDX, GDXJ, and SILG) have shown strength, outperforming gold. However, they have not yet reached new all-time highs, having rallied back to their October highs and encountered resistance. This is viewed as a bullish setup that is expected to resolve to the upside.
• Stock Market Correlation: The stock market has rallied back to its previous highs. The relationship between gold and the stock market is currently forming a triangle consolidation, with an uncertain resolution. A breakdown in this consolidation could lead to a few weeks of weakness in the precious metals sector.

The Gold to Silver Ratio Breakdown

• Key Event: The most significant story of the week was the breakdown in the gold to silver ratio. This ratio, calculated as gold price divided by silver price, indicates relative performance: a lower ratio means silver is outperforming gold, and a higher ratio means gold is outperforming.
• Historical Context: The ratio has moved down from historically high levels, exceeding 100.
• Technical Breakdown: The ratio has broken below the support level of 75, marking the lowest weekly close since 2021, representing a new 4-year low.
• Future Support and Potential: The next strong support level for the gold to silver ratio is identified around 65. A move to this level could imply significant upside for silver relative to gold. The possibility of reaching $6,000 gold and $100 silver is considered.
• Historical Precedents: Sharp moves in favor of silver have historically been strong and rapid, with precedents observed after the COVID crash low, in 2011, 1997-1998, the early 1980s, the late 1970s, and 1973-1974.
• Short-Term Outlook: A short-term snap-back to around 75 is possible before a potential move down to 65.

Silver Analysis with Analog Charts

• All-Time High Breakout Analog Chart (Daily Data): This chart analyzes silver's potential based on historical breakouts to new all-time highs in 1967, 1973, and 1979.
  • Current Position: The current price action in 2025 is compared to these historical patterns.
  • Projected Target: Based on the analog charts, a target of approximately $80 per ounce is projected for June of the following year (approximately 6 months from the recap date).
• Historical Performance Comparison:
  • 1978-1980 (Blue Line): This period saw silver surge to $400 per ounce on the current scale.
  • 1973 (Red Line): This move peaked just below $130 per ounce.
  • Current Move (Black Line): The current performance in silver is noted as not dissimilar to the 1972-1974 move.
• 1972-1974 Analog Projection: If the current market follows the 1972-1974 pattern, silver could peak in early 2026 (just after the first quarter), potentially exceeding $100 per ounce based on weekly data.

Big Picture Silver Analysis

• 170-Year Chart: A long-term perspective (170 years) shows silver in a significant base formation with substantial room for upward movement. While extreme long-term predictions like $40,000 in the 2030s are mentioned, the focus is on the current breakout.
• Silver vs. S&P 500:
  • Historical Relationship: The ratio of silver to the S&P 500 has historically been much lower than its current level. During the Civil War peak for gold and silver, the ratio was around 1.1. In 1920 and 1980, the S&P 500 divided by silver was 6 and 3, respectively.
  • Current Status: The S&P 500 divided by silver is currently at 117, indicating silver is significantly undervalued relative to the stock market.
  • Breakout and Potential: Silver is breaking out to a new all-time high, emerging from a 45-year base. This is described as the "second greatest breakout of all time."
  • Secular Bull Market Potential: The ratio of silver to the S&P 500 is expected to move significantly in favor of silver, potentially reaching 10 or higher in a secular bull market.
  • Comparison to the 1960s/1970s: Similarities are drawn to the 1960s and 1970s when silver broke out to new highs, and its ratio to the S&P 500 was very low, subsequently climbing dramatically. This suggests silver is in a similar early stage of a major upward move against the stock market.

Short-Term Silver Outlook

• Ascending Triangle Pattern: Silver's daily candle chart exhibits an ascending triangle pattern.
• Price Targets:
  • Minimum measured upside target: $62.
  • Projected target based on the ascending triangle: $66.
  • These targets are considered for the next few months.
• Support Level: Support is identified around $54, with a potential pullback to $53-$54 not negating the breakout. An 8-9% decline is considered within the normal range for silver.

Gold Outlook

• Current Position: Gold is approximately $200 below its all-time high of $4,400.
• Projected Pattern: The expectation is that gold will evolve into some form of bullish consolidation, which is anticipated to take at least a couple more months.
• Distinction from Triangles: The current gold price action is described as bullish consolidation, not yet a true triangle pattern, which requires more time to develop.

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Mining Stocks Analysis

• GDX Advanced Decline Line:
  • Indicator: The advanced decline line is a participation indicator that tracks the cumulative number of advancing versus declining stocks in a sector. A healthy market is characterized by most stocks rising.
  • Positive Divergence: A strong positive divergence is observed. While GDX has not made a new high, its advanced decline line has made two higher highs. This indicates underlying market health and is a positive sign for gold stocks, though not an immediate signal for a blast-off.
• Recent Performance: Miners experienced a good rebound but encountered selling pressure for most of the week, particularly near their October highs (for GDX, GDXJ, SILG).
• Short-Term Outlook:
  • Desired Scenario: The ideal scenario is for the market to continue correcting and consolidating, building energy for a subsequent upside explosion.
  • Gap Fills: Several gaps on the charts (e.g., in SIJ) are expected to fill, representing short-term downside potential.
• Long-Term Potential: The current price action could potentially develop into a cup and handle pattern, which is viewed favorably heading into 2026.

Conclusion

The week ending December 5th, 2025, was marked by silver's significant outperformance against gold, evidenced by the breakdown of the gold to silver ratio below 75, a 4-year low. Silver is showing technical strength with positive divergences and is poised for further gains, with short-term targets around $62-$66 and historical analogs suggesting potential for much higher prices. Gold is consolidating, expected to take more time before a significant move. Mining stocks, while facing near-term resistance, exhibit strong underlying participation and are in a bullish setup. The broader market context, particularly silver's breakout against the S&P 500 from a 45-year base, suggests a long-term secular bull market for silver with substantial upside potential.