In the silver market, the debate almost always circles back to a single question: should you own the metal itself, or the companies that mine it? offers a timeless appeal: it’s tangible, finite, and immune to management missteps. Yet in every metals bull cycle, there comes a point when miners dramatically outpace the metal they produce. These inflection points are rare, but when they occur, the gains can be explosive.
The charts suggest that such a moment may be approaching again. The AG/Silver ratio, a simple yet powerful gauge of how First Majestic (TSX:) is performing relative to silver, is flashing technical signals we haven’t seen in nearly a decade. After four years of persistent decline, the ratio has finally broken its downtrend and is now pressing against a multi-year resistance level tied to a classic reversal pattern.
History offers a compelling precedent. The last time this ratio was set up in a similar way, AG went on a 330% tear in six months. Markets never repeat themselves exactly, but they often rhyme. And right now, the rhyme scheme unfolding in AG’s chart looks distinctly bullish.
Let’s dive into the charts to see how the AG/Silver ratio has evolved over the past four years, why the recent breakout marks such a critical turning point, and what the underlying patterns reveal about where AG may be headed next.
A 4-Year Downtrend Finally Broken
To understand the significance of the 4-year downtrend breakout, it is helpful to recall the path that led to this point. For nearly four years, the AG/Silver ratio was locked in relentless decline. Investors consistently chose the safety of silver over the risk of AG stock, and the reasons were clear: operational setbacks, dilution concerns, and the perception that bullion was the cleaner, more reliable play.
The ratio chart reflected that preference unmistakably: a sequence of lower highs and lower lows, all contained below a well-defined downtrend line that stretched back to early 2021. For years, every rally attempt failed, reinforcing the belief that AG was destined to underperform the very metal it produced.
Figure 1: Four-year downtrend breakout and golden cross on the AG/Silver ratio’s daily chart
However, markets don’t trend lower forever, and by mid-2025, subtle shifts began to appear. Instead of collapsing to new lows, the ratio started grinding higher, with each rebound off support gaining more strength. Then in July, a critical development added weight to the shift: the 100-day simple moving average crossed above the 200-day SMA, forming a golden cross. This momentum signal suggested that the long-term downtrend was losing its grip and that buying pressure was beginning to take control.
By September, that shift translated into decisive price action as the ratio finally punched through the ceiling of its four-year downtrend, breaking a structure that had defined sentiment for nearly half a decade.
This breakout carries real weight. When a ratio reverses a multi-year trend and does so alongside a bullish moving average cross, it confirms that the underlying relationship between the two assets has changed. In this case, the market is no longer satisfied hiding in the safety of silver. Instead, it is beginning to reward the higher-risk, higher-reward proposition of owning First Majestic. Put simply: the market is signaling that AG is ready to outperform silver, and the era of persistent relative selling pressure is over.
The Triple Bottom: Accumulation in Disguise
If the break of the four-year downtrend was the decisive confirmation that conditions had changed, the triple bottom was the first signal that those changes were already underway.
Between September 2024 and May 2025, the ratio carved out three distinct lows, each one attracting determined buyers who refused to let the market slip further. With every retest, demand grew more visible. When buyers step in more aggressively each time a support level is tested, it suggests that accumulation is occurring—typically led by institutions and value-focused investors who build positions quietly while retail interest remains muted. By the time the third low sparked the strongest rebound of the sequence, it was clear that selling pressure had been exhausted and that demand was beginning to reassert itself.
Figure 2: Triple bottom formation on the AG/Silver ratio’s daily chart
That accumulation phase laid the foundation for the breakout that followed. When the ratio finally broke through the ceiling of its four-year downtrend in September 2025, the move wasn’t random; it was the natural resolution of months of basing activity. In effect, the triple bottom wasn’t just a reversal pattern on its own. It was the fuel that powered the breakout, proving that capital had already started rotating back into AG well before the broader market recognized the shift.
The same dynamic was echoed in AG’s own price action. On its daily chart, the stock spent more than two years grinding out a rounded bottom base that reached completion just as the ratio was forming its third and final low. Rounded bottoms typically mark the gradual return of demand, where volatility compresses, higher lows emerge, and patient capital begins to re-enter. In AG’s case, this base provided the structural foundation for the next leg higher.
Figure 3: Two-year rounded bottom pattern on AG’s daily chart
The alignment of these two bases—the triple bottom on the ratio and the rounded bottom in AG’s chart—is what makes the current setup so compelling. Both the stock itself and its relative performance against silver are delivering the same message: capital has been steadily flowing back into AG, laying the groundwork for renewed leadership.
That message is already being validated. AG’s recent breakout above its $9.43 neckline, together with the ratio pressing against its neckline at 0.28, underscores an ongoing synchronized technical reversal. A decisive move through 0.28 on the ratio projects toward 0.50, which would nearly double AG’s relative outperformance versus silver. On the stock side, the breakout from its rounded bottom base carries a medium-term projection toward $21: a target that aligns perfectly with the implications of the ratio’s measured move.
Figure 4: Measured move target on the AG/Silver ratio’s daily chart
Viewed together, these formations are not coincidental echoes but two sides of the same story. Both point to multi-year accumulation now resolving higher, strongly suggesting that the market is beginning to reprice AG as a leveraged winner in the next silver cycle.
The 2016 Precedent: A Playbook Worth Remembering
Skeptics may wonder whether the AG/Silver ratio has ever provided meaningful signals before. The answer is yes, and the last time it did, the results were nothing short of explosive.
Back in 2015–2016, the ratio developed a setup that looks almost identical to what we see today. After years of decline, it carved out a triple bottom, briefly faked lower, and then surged higher once the neckline was decisively broken. The outcome was dramatic: the ratio rallied 253% in a matter of months.
Figure 5: Historical triple bottom on the AG/Silver ratio’s daily chart
For AG’s stock price, the implications were even greater. That ratio breakout translated into a 330% rally in the shares, which surged from about $4 to more than $18 in just six months. That’s the leverage dynamic in action. When silver rises, miners tend to rise more. And when investor sentiment shifts away from the safety of bullion toward the higher torque of equities, the compounding effect can deliver outsized gains.
Figure 6: Historical triple bottom on AG’s daily chart
In short, history shows that the ratio has the power to flag regime shifts well before they become obvious. In 2016, it did exactly that, and AG responded with one of the most powerful rallies in its modern history. The technical structure unfolding now bears an uncanny resemblance, raising the possibility that history may be about to repeat itself.
If we apply the same logic today and project a 330% rally off AG’s most recent rounded bottom breakout at $9.43, the math points to a long-term price target of roughly $40.50. That figure doesn’t stand alone; it’s supported by AG’s stronger fundamentals, its improved operational profile, and the powerful macro tailwinds currently driving the silver market.
Figure 7: Long-term AG price target
Why This Cycle’s Move Could Be Even Bigger
Of course, no two cycles are identical. But there are reasons to believe this potential breakout could be even more impactful than 2016, and it comes down to the rare alignment of fundamentals, technicals, and psychology.
Let’s begin with the miner’s fundamentals. In January 2025, First Majestic completed its acquisition of Gatos Silver, securing a 70% stake in the Cerro Los Gatos Mine. This long-life, high-grade asset instantly elevated AG’s production profile to 30–32 million silver-equivalent ounces annually, with 15–16 million ounces of pure silver. That alone provides a significant boost to AG’s leverage to silver prices. But the impact goes deeper: the acquisition also delivered cost synergies and supply-chain efficiencies that set the stage for margin expansion. Management’s decision to raise production guidance almost immediately was a vote of confidence that this new trajectory is not just theoretical but achievable.
The acquisition story quickly translated into results. In the second quarter of 2025, AG reported record revenues of $264 million, a 94% year-over-year increase. Earnings swung from a $0.17/share loss to a $0.11/share profit, while production surged 48% to 7.9 million silver-equivalent ounces. Pure silver output also soared an impressive 76%. These figures mark the strongest operational improvement in years and lend hard evidence that AG is executing, not merely promising. The technical breakout is therefore underpinned by tangible performance.
The broader metals environment is another force multiplier. Silver recently hit a 14-year high above $41 per ounce, while reached new records above $3,578 per ounce. These moves aren’t happening in isolation: they are supported by a weaker , intensifying safe-haven demand, aggressive central bank buying, and rising expectations of monetary easing. For a silver-heavy producer like AG, such an environment doesn’t just lift revenues; it magnifies every operational improvement, feeding directly into stronger margins and cash flows.
Furthermore, unlike 2016, when AG’s relative breakout blindsided many, institutions are paying close attention this time. Precious metals have re-entered mainstream conversation, driven by inflation, geopolitical uncertainty, and monetary policy shifts. And importantly, the memory of AG’s 330% rally in just six months lingers. When a breakout this clean emerges against that backdrop, the recognition phase can unfold much faster than before, accelerating institutional flows into the stock.
Meanwhile, silver itself is coiled within a multi-decade cup-and-handle formation on long-term charts. A confirmed breakout in silver prices would not only reinforce AG’s gains but could also trigger a wholesale re-rating across the mining sector. Thanks to its enlarged production profile and operational leverage post-Gatos acquisition, AG is well positioned to lead that charge.
Finally, psychology plays a critical role. After four years of punishing underperformance, AG trades at a relative discount to peers. That sets the stage for outsized percentage gains once sentiment flips. And perhaps most importantly, disbelief remains high. Many investors remain skeptical that AG can outperform silver after years of disappointment. But disbelief is often fuel in the financial markets. When price action begins to prove them wrong, the rush to re-enter can drive powerful momentum, turning disbelief into the catalyst for a chase higher.
Risk Management: The What-Ifs
No analysis is complete without considering what could go wrong, and the AG/Silver setup is no exception. The first risk lies in the breakout itself. If the ratio clears 0.28 but then quickly reverses back below, it would signal a failed breakout. Such failures often suggest that demand isn’t yet strong enough to sustain higher prices. A similar head-fake occurred briefly in 2015 before the true breakout unfolded, reminding us that markets rarely move in straight lines.
Beyond technical risks, company-specific factors also play a role. First Majestic is still an equity, not the metal itself, and with that comes execution risk. Operational setbacks, shareholder dilution, or an inability to fully capture the benefits of higher silver prices could all weigh on performance. In that scenario, the ratio might stall or roll over, even if silver itself continues to rally. That’s the inherent trade-off of equity exposure: the potential for amplified returns, but also the possibility of amplified disappointments.
Even so, the technical picture provides important guideposts for judging whether the bullish thesis remains intact. The triple bottom neckline continues to serve as the first line of defense, but equally significant is the golden cross that formed in July 2025, when the 100-day SMA rose above the 200-day SMA. As long as the ratio sustains this bullish alignment, the underlying momentum remains constructive, and the path of least resistance points upward.
In other words, the bullish thesis stands unless proven otherwise. And at present, both price action and trend signals continue to favor a breakout that sticks.
The Bottom Line
Markets reward patience, and few charts have tested patience more than the AG/Silver ratio. After years of grinding lower, the technical picture has shifted in a decisive fashion: a triple bottom base has taken shape, a four-year downtrend has been broken, and the neckline that capped rallies for two years is now on the verge of giving way. Add in the historical precedent from 2016, and the message is clear: AG is positioned to outperform silver.
What the ratio signals is more than just a technical shift. It reflects a change in psychology. Investors are showing that they are no longer content with the safety of bullion alone. Capital is beginning to embrace the leverage of miners, and particularly First Majestic’s ability to translate higher silver prices into amplified returns.
The targets align with this narrative. In the medium-term, the rounded bottom measured move points to $21. Yet if history truly rhymes with the 2016 playbook, the implications are far greater. A 330% rally from the $9.43 breakout base maps to a bold upside case near $40, a level that would redefine AG’s role in the silver cycle.
Of course, history does not guarantee the future, but when the technical and fundamental evidence rhyme this loudly, it pays to listen. If the breakout confirms, AG has the potential to once again become one of the standout performers of the precious metals bull cycle. For those positioned early and with discipline, the rewards could be every bit as dramatic—and perhaps even more so—than the last time this setup appeared.