A gold price of $7,000 sounds like a wild prediction. However, the argument for a sharp rise in the price of gold has been gaining traction in secret all this time. Central banks are buying in huge quantities, governments are printing more and more currencies and political uncertainty continues to increase.
Various financial institutions and macroeconomic analysts have continually increased their forecasts. When you put it all together, $7,000 worth of gold no longer sounds random. It looks like the top end of a trend that’s already underway. The question for silver traders is simple. If gold hits $7,000, where will the price of silver go?
A falling ratio means silver is performing better
We looked at the gold/silver chart. The ratio currently stands at 60.908, down 0.09% from the session. The 100-period SMA is above 63.122, meaning the ratio is below its longer-term average.
This is a bullish signal for silver. When the gold/silver ratio falls, silver outperforms gold. The ratio could fall even further into the 58,000-56,000 range, which would be even better for silver.
The RSI on the 4-hour chart is at 43.93, neutral to slightly bearish. The divergence indicator shows a bearish configuration on the last uptrend, which means that the momentum of the relationship is weakening. This typically precedes a decline in the ratio, which in turn favors silver over gold.
Why a gold price of $7,000 is even being discussed
This isn’t just a random number being thrown around. In the background, arguments for significantly higher gold prices are piling up. Central banks are buying gold like never before, especially outside the West. This is not speculative demand. This is strategic positioning.
Governments are constantly expanding the money supply and running deficits, and gold is one of the few assets that cannot be printed. Geopolitical risks continue to rise and each new headline drives more capital to safe havens.
Major banks and macro analysts have continually increased their targets. Some say $3,000. Others say $5,000. Some are now predicting the scenarios to reach $7,000 in extreme conditions.
These are not retail voices. These are institutions that look at macroeconomic trends over years, not weeks. When you put all of that together, $7,000 worth of gold doesn’t sound wild anymore. It looks like the top end of a trend that’s already underway.
Also Read: Where Is Silver Price Heading Next? Another short squeeze is brewing as demand exceeds supply by 50 million ounces
Where the price of silver goes from here
The 4-hour chart shows the gold/silver ratio is below its 100-period SMA and losing momentum. This is a bullish setup for silver. The ratio is supported at 58,000, 56,000 and 54,000. Any decrease in the ratio drives up the price of silver for a given price of gold.
The price of silver today is around $75. If gold hits $7,000, a realistic range for silver prices is $115 to $175 per ounce, depending on how much the ratio narrows. In a super bull case where the ratio drops to 30, silver prices could reach $233.
The macroeconomic case for $7,000 gold isn’t crazy. Central bank purchases, money printing, geopolitical risk. It’s all there. Silver is waiting for the relationship to do its part. According to the graph, the ratio is starting to change.
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