So the chart above gives us a 15 year perspective on the GSR. As you can see, the natural high over this time period is around 80. There were a couple brief moments when it spiked meaningfully higher, but those instances were fleeting and quickly corrected. On the other side of the coin, you can see the natural low has been somewhere near 45, with the obvious spike lower in early 2011. Now, what does this mean in context of today's reading of 72.6?
My first observation is that the GSR just recently (last month) reached its natural high for the first time since late 2008. That's clue #1 that the ratio is running into some serious resistance. Secondly, the very slow-moving monthly MACD has just made a bearish cross. This has only happened two other times since 2000, both of which marked long-term tops in the GSR. I see no reason why this time would be any different, so clue #2 is that the momentum indicators are flashing some major warning signals.
That said, the GSR remains in the rising channel noted by the green lines. It's had multiple tests of both the upper and lower bounds over the last several years so it has to be respected. Until the GSR breaks below the lower green line, the long-term uptrend remains intact. Given the two clues noted above, however, I suspect that will happen sooner rather than later.
Earlier I stated that the natural high and low over the last 15 years was around 80 and 45, respectively. So IF the GSR breaks below that channel, then I think it has a real shot at falling all the way down to 45. This would mean that silver is going to outperform gold for quite some time (remember, this is a long-term chart with each bar representing a month of trading). It could mean, of course, that silver simply falls less than gold, but I believe that both metals will rise with silver outperforming.
You can clearly see that the very long-term natural high is right around 100 and the very long-term natural low is near 15. Based on this chart, you can argue that the GSR is in a cyclical bear market and the recent ascent to 80 is nothing more than an intermediate bull run within a much larger down-cycle. In order to reach the very long-term natural low, the GSR would need to fall close to 80% from current levels. What this means in more tangible terms is that silver needs to see an epic rise in value relative to gold in order to achieve a GSR of 15.
Here's an example to help illustrate my point. Today, gold is roughly $1140/oz and silver is roughly $15.85 giving us a GSR of 71.9. Let's say gold doesn't move in price - it stays right at $1140. In order to get the GSR to its natural low of 15, silver would need to increase to $76/oz(!), or almost 5 times its current price. Going one step further, let's say gold rises back to its 2011 high of $1900/oz. That would mean silver needs to rise 700% to $126. Impossible? It's happened before so why not again?