Gold/Silver Ratio (XAU/XAG) – Monthly Chart

ABC Correction in Progress with Risk of C-Wave Extension

The Gold/Silver ratio on the monthly timeframe provides valuable insight into the relative strength cycle between gold and silver. Rather than focusing on absolute price direction, this ratio highlights periods of outperformance and underperformance, which often unfold in large, clean structures.

🔍 Structural Overview

From a long-term perspective, the ratio appears to be forming a classical ABC corrective pattern:

• Wave A:
  A sharp impulsive decline, marking the first phase of correction after a prolonged advance.

• Wave B:
  A deep retracement that remained corrective in nature, capped near a descending channel resistance and the 0.236 Fibonacci retracement. The overlapping price action and lack of impulsive follow-through favored a corrective interpretation rather than trend resumption.

• Wave C (Extending):
  The recent strong bearish expansion suggests that Wave C is unfolding with momentum. At this stage, C may subdivide internally and extend, which is common in ratio and spread charts.

📐 Fibonacci & Channel Confluence

Multiple technical factors align around current levels:

• Price has already retraced toward the 0.886 Fibonacci zone

• The decline is interacting with the lower channel structure

• Momentum expansion supports continuation risk rather than immediate reversal

These confluences strengthen the case for Wave C still being active.

🔑 The Critical Level: 43.15

The 43.15 region represents a prior major monthly swing low, making it a crucial inflection point.

• Above 43.15:
  The ratio may attempt stabilization or form a complex corrective pause.

• Below 43.15 (monthly close):
  Confirms C-wave extension, opening the path toward lower Fibonacci extension zones in the 40–41 region and potentially deeper over time.

⚠️ Important Context

This analysis is based on a monthly ratio chart, which tends to compress price action and delay clear impulse confirmation. For this reason, the structure is intentionally labeled as ABC for now, allowing flexibility as further data unfolds.

Impulse labeling will only be considered once structure and momentum confirm decisively.

🧠 Conclusion

The Gold/Silver ratio remains in a corrective phase, with downside risk still active as long as Wave C continues to extend. The 43.15 level will be critical in determining whether the ratio stabilizes or accelerates lower.

Patience and structural confirmation remain essential.

This analysis is for educational purposes only and not financial advice.

https://www.tradingview.com/chart/XAUXAG/Cbwb2VH6-Gold-Silver-Ratio-Monthly-ABC-Correction-in-Progress-C-Wave/