GOLD FORECAST 2020 – SILVER – GOLD/SILVER RATIO 31 Jan-7 Febr

Gold/USD	LT-M	MT-W	ST-D
1589 (1571)
Trend	↑ (↑)	↑ (↓)	↑ (↓)
% Risk Weight	84 (83)	76 (72)	77 (40)
Allocation	100% (100%)

Gold has now taken out all but 2 of the 2011 and 2012 long term highs against world currencies, including against EURO. The exceptions are USD and CHF due to the stranglehold on the USD as world reserve currency. Against CHF, gold sits just 9% below the October 2012 peak and against USD 17% below the September 2011 peak. It is just a matter of time that Gold will show its hand as ultimate hard insurance asset. As the majority direction is always decisive over time we could argue that the current uptrend of Gold against USDollar is comparable to the period 2006-2008. If the current Gold uptrend is as strong today in 2020 as 10-15 years ago this could imply that the short term risk weight will continue to develop risk weight bullish divergence versus Medium Term and Long Term whilst MT and LT risk weight continue to develop possible bearish divergence just like MT in its own timeframe is doing today as clearly visible in our favoured technical tools The next 3-6 months will be quite critical in this respect. With risk trends positive and with strong cushion against the existing position we stay with a full investment allocation to Gold.

Last week: Gold’s Weekly trend has turned down this week whilst price was up 1% and Weekly is now confirming bearish divergence in its own time frame. This makes the long position technically vulnerable and subject to more serious review. As the Daily time frame has NOT shown bearish divergence in its own time frame and has stretched itself down and away from the weekly trend, whilst the LT is narrowly up, we must consider a strong possibility of further advance near term. As the cushion against entry is large we hold the position unchanged

Silver/USD	LT-M	MT-W	ST-D
18.00 (18.07)
Trend	↑ (↑)	↓ (↓)	↑ (↑)
% Risk Weight	63 (64)	65 (66)	33 (20)
Allocation	100% (100%)

Silver was knocked down this along with copper, oil and other industrial commodities, yet recovered fairly comfortably in the precious metals space. Even though weekly risk weight trend is slightly down the overall chart pattern remains narrowly firm. We stay with full Silver allocation as the potential for a very strong advance in due course is still very much on the table.

Last week: The week ended slightly up and a bit weaker than expected. Similar to Gold the Weekly trend turned down whilst the Daily has already a bullish divergence uptrend last week. The Weekly technical picture is asking for a forceful press up, but still appears to be holding off the expected move towards the 21.00 level. The technical picture is asking for patience and thus we hold full allocation

GOLD/SILVER Ratio	LT-M	MT-W	ST-D
87.93 (86.51)
Trend	↑ (↑)	↑ (↑)	↓ (↓)
% Risk Weight	45 (45)	65 (61)	75 (78)
Allocation	50/50 AU/AG (50/50 AU/AG)

Just like Silver/USD, the Gold Silver ratio rallied strongly on the perceived consequences of China trade due to the Corona virus pandemic. We know this is likely to be a temporary market adjustment whilst the 1.5% move isn’t even that dramatic. We continue to aim for a return to equilibrium nearer the Ratio 50 level. No Change.

Last week: The Gold/Silver ratio is in No Man’s land. As there is a cushion to protect against loss and a massive margin versus historic equilibrium, there is no reason lighten up. This relationship of course mirrors that of Silver/USD and technically breaths patience. Right now we cannot not argue against a possible advance direction 90 and without any technical evidence between time frames and move this ratio in favour of gold, we stay with our weight on Silver. No Change