GOLD FORECAST 2020 – SILVER – GOLD/SILVER RATIO 7-14 Febr

Gold/USD	LT-M	MT-W	ST-D
1569 (1589)
Trend	↑ (↑)	↑ (↑)	↑ (↑)
% Risk Weight	88 (84)	77 (76)	35 (77)
Allocation	100% (100%)

Corona or some other median trader emotion feel took Gold, and other commodity assets, down just over 3% to 1547 before recovering to 1569 at the end of the trading week. The Daily risk weight dropped into a bullish divergence versus Weekly and Monthly with all time frames in a fairly narrow risk weight uptrend. Gold appears to be developing a triangle pause between 1600 and 1540 with apex at the end of Febr – early March. We stay fully allocated.

Last week: 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

Silver/USD	LT-M	MT-W	ST-D
17.67 (18.009)
Trend	↑ (↑)	↓ (↓)	↑ (↑)
% Risk Weight	65 (63)	61 (65)	31 (33)
Allocation	100% (100%)

Silver suffered a little more than gold but holds the same risk image as Gold except the weekly mid term risk weight is in a narrow downtrend. The Gold/Silver ratio is mixed and is not indicative of an imminent explosion of Silver upwards. We stay with our full allocation.

Last week: 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

GOLD/SILVER Ratio	LT-M	MT-W	ST-D
88.49 (87.93)
Trend	↑ (↑)	↑ (↑)	↓ (↓)
% Risk Weight	51 (45)	70 (65)	57 (75)
Allocation	50/50 AU/AG (50/50 AU/AG)

The upward trend in the ratio may not yet have finished. The picture is that of the USD Index and fighting the inevitable outcome of substantial weakness. We need patience. With Monthly at mid range neutral level in an uptrend lags the shorter term Weekly that now looks to develop bearish risk/price divergence in its own timeframe. We remain evenly to slight overweight silver positioned between Gold and Silver with full allocation.

Last week: 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