Silver/Gold Ratio: Not This Time, Silver Bugs

The Silver/Gold ratio has not so surprisingly failed to lead the bug-o-sphere to glory.

There was excitement aplenty as the Silver/Gold ratio broke out of the downtrend channel, because when silver moves, it MOVES. It titillates supposed ‘honest money’ advocates even though honest money is a holder of value, not a play. In other words, it is gold, not silver. Silver is a play off of gold’s status and often/usually a precious metals sector leader (in both directions). But gold is a monetary value holder, and silver is much less so.

The Silver/Gold ratio was indicated to be signaling ‘party over’ as noted on April 12:

Still waiting on a more pervasive “wrecking the markets” as the initial market pullback was fairly routine. But another shoe can still drop there as well. Indeed, there is technical reason to believe the stock market correction is not over.

Meanwhile, the Silver/Gold ratio is dropping back toward the lower line of the young uptrend channel. This will dispirit the average gold bug who is a silver bug who is an inflation bug. However, the 2024 trend is up, so it will be interesting to see if silver will have another upside leadership move in it after the current correction plays out.

But first things first; the play is over for a while. If this continues and if the Gold/Copper ratio holds up and turns up, I would not want to be a died in the wool inflationist either.

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