Gold/Silver ratio drops to 200-week SMA for first since April 2017

• Gold/Silver ratio tests key support for the first time in over three years. 
• Despite the recent rally, silver remains well below the record high reached in 2011. 
• Gold is just 3% away from setting a new lifetime high. 

Gold/Silver ratio has been sold off aggressively this week with silver outperforming gold by a big margin. 

Ratio tests 200-week SMA

The ratio fell below the 200-week simple moving average (SMA) of 82.57 on Wednesday to print a low of 80.71. The 200-week SMA has come into play for the first time since April 2017, according to data source TradingView. 

The ratio is currently seen at 82.75 points, representing an 11.5% drop on a week-to-date basis and a 34.6% decline from the high of 124.56 reached in March. As such, one may feel that Silver is not overbought or overvalued. 

However, despite having rallied by 26% this year, the semi-precious metal is trading way below the record high of $49.83 observed in 2011. 

On the other hand, gold is currently trading at nine-year highs above $1,865 and is just 3% short of setting a new record high above the September 2011 high of $1,920. 

Put simply, silver has plenty of room to rally. 

Technical levels