Dow:Gold 21AUG16
I’ve been watching this potential head and shoulders pattern developing in the Dow/Gold ratio. As usual the market is keeping me in suspense from week to week as to whether or not this pattern is real or just wishful thinking. As you can see, the ratio is dancing around with that upper trend line, trying to make us think it is going to breakout.

However, if the pattern is valid we could see some exciting action pretty soon, especially if the Dow continues to move up as the 8.5 price objective is attained. As you can see, even at a modest 18,000 on the Dow, the PO would be over $2,100 for gold.

Remember, This ratio dropped down to about 5.5 in 2011, and many, including myself, expect it to get back to 1.0 or thereabouts before this secular gold bull is over.