Which is better to own now: silver or gold?

August 7th^NS, 2020, silver (XAG / USD) hit an all-time high of 29,857. That was the beginning of a long-term symmetrical triangle! After pulling back from that high, silver fell to a low of 21.667 on September 24th^NS, 2021. However on February 1st^NS the previous high was momentarily reduced by pennies as the Reddit folks got behind the precious metal and rebounded it from 26.991 to 30.082. Silver oscillated in the symmetrical triangle through August 6th^NSwhen it broke aggressively down to 22,259. The price is currently trading around $ 3 below the triangle but is approaching the resistance (previous support) at 23.96. If silver breaks above it, the next resistance is at 24.562 and then at 25.555.

Source: Tradingview, Stone X

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Gold (XAU / USD) has seen a similar price move as silver since the August 7th 2075.11 high^NS, 2020. However, gold continued to hit lower lows through March 31^NS (while silver made higher lows) near 1667.88. The precious metal moved above the downtrend line to 1916.92 on June 1st^NSbut has not traded higher since then. Price has tested the 1678.88 level three times and is currently testing a strong resistance zone between 1805.87 and 1811.18 made up of the horizontal resistance and the 200 day moving average. If the price breaks the upside, there is the 61.8% Fibonacci retracement level from the June 1st highs^NS until the most recent touch of 1678.88 near 1825.90 and another horizontal resistance near 1833.95.

Source: Tradingview, Stone X

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Let us now turn to the gold / silver ratio (XAU / XAG). Over the same period, the ratio was relatively between 62.066 and 85.82. XAU / XAG hit a low of 62.066 on February 1^NS (Silver reached its all-time high on the same day) and has since moved sideways / higher. July 19th^NS the ratio was hovering around the 200-day moving average near 70,735 and broke horizontal resistance on August 18th^NS near 75,332. On Friday, the ratio managed to break the 61.8% Fibonacci retracement level from Jan.^NS, 2020 highs by February 1st^NS Lows near 76,582. Today, however, the ratio has pulled down again. Also note that the RSI has just retreated from the overbought area (70) and may be trending lower. If so, gold could outperform silver in the short term, and silver will be a relatively better buy than gold. However, if the ratio holds 75.332 (former resistance) the ratio could move further towards previous highs at 85.52. In this case, gold would be the better precious metal compared to silver.

Source: Tradingview, Stone X

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With gold encountering a confluence of resistance and the gold / silver ratio falling today, silver may be a better option in the short term. However, if the ratio stays above the 200-day moving average near 70.29 and the RSI can relax a bit, gold could be the precious metal to turn to as it could outperform silver in the longer term.

Learn more about gold and silver trading opportunities.