I haven’t traded Gold once this year. Am I stupid?

I think the immediate answer to the question as you’re reading this is yes. But what you may not know is why I opted to not trade Gold and trade something else instead. 

Since the beginning of 2023, Gold prices have risen over 68% from low to highs. 

Initially when the price broke the 2021 lows at the end of 2022, I was bearish Gold. I couldn't have been more wrong at that point. 

Anyway, that is an incredible gain, and I’m sure I am not the only one out there that hasn’t directly traded it? Or am I?

When the Gold prices continue to break into new highs, I find it difficult to look for targets. Now that may be a silly decision from me in the grand scheme of things. But at the end of the day, targets for me matter. 

Now I could have leaned on the whole numbers that had been floating around the ether, $3,000 for instance. But I felt that the entire market was looking at that level, and I imagine some retail traders may have even tried to short that level. 

Honestly, I feel like this market is overcrowded. When something is ‘hot’ in the market and an asset takes off and grabs all the headlines, I find it difficult to buy that market. Not sure if this is some kind of personality trait, but hey that’s just me. 

Have you ever been in a situation where you’re hungry, on a street full of food vendors, and your favourite place has a huge queue, but your second favourite has a small queue? I go for the smaller queue all day everyday. 

Another point was, I struggled to get an entry using my style of trading. Being a swing trader I saw the market prices rallying but I always felt the corrections would be deeper, as I looked for a high value trade. Essentially, I was waiting for cheaper prices to buy. The prices I wanted have never been tested. 

But being a trader and having an understanding of market correlations I wanted to explore a market that was ‘cheap’ to buy. 

I decided to go with a different option. 

Since the beginning of this year (2025) I have bought into Silver 6 times. With all of them being successful trades.

Key tip for you. When a market is taking off and you feel you have missed the move, instead of fomo’ing yourself into the trade. Go and look for markets that correlate that may be cheap. 

Current correlations show me that Silver and Gold have a 92% correlation at the moment. 

This means that if Gold prices continue to climb, then there is a strong probability that Silver will go with it. 

I know what you are thinking…it can’t be that simple, and you will be right. 

Whenever I want to trade Silver I always look into the GOLD/SILVER ratio chart. This chart has been incredibly helpful when timing Silver positions. 

The GOLD/SILVER ratio simply divides the price of Gold to the price of Silver. What it shows me, is when Gold prices are overbought or oversold compared to Silver. 

Take a look at this chart. 

I have compared the Silver price (purple line) with the GOLD/SILVER ratio (black line). As you can see clearly, over the past two years when the ratio reached the 90.00 zone, Silver prices rallied.

This is because investors see that Gold prices are overvalued compared to Silver, and will liquidate some Gold to buy the cheaper commodity. 

Looking at the situation now, it seems the ratio is back at these highs. This is why I have been buying Silver all year. The ratio is telling me that there is a chance that investors will flow capital into Silver instead. 

Let’s add a little chilli to the pan. 

The commitment of trader reports (booo not again) shows that hedge funds have been decreasing positions in Gold but increasing positions in Silver. Just what the ratio shows us. 

That is fascinating to me, and backs up my trading idea, that Silver could be a market that out performs this year. 

I could go even deeper and highlight all the Gold miners and whatnot but I will leave that out for this post, but I hope the evaluation of the ratio has opened you up to an idea of two in the future. 

Silver prices right now have broken through the $33.00 resistance highs. This could be a level where we see buyers step back in, with the right conditions. Another possibility is the trend line support which formed from the lows on the 28th February, anchored to the low of the 11th March. A trend line across these lows holds confluence with the $33.00 level. 

Keep an eye on this one traders and good luck!