An interesting take on the Gold/Silver ratio....
An interesting take on the Gold/Silver ratio....
Silver analyst Ted Butler had a very interesting graph in his weekly review that he published over the weekend. It's the silver/gold ratio going back thirty years...and it's a sight to behold. This is what Ted had to say about it. "Once again, I ask you to step back from thinking about the gold/silver ratio itself [even though I just brought it up], and instead focus on the what the tightening ratio means in practical terms. What it means is this -- anyone who switched from gold to silver at almost any point over the past 28 years would have been better off [made more money] for having done so. And, considering recent developments, I believe that a switch from gold to silver continues to make sense."
Ted also addressed the silver backwardation issue with the following comments..."Now there are signs emerging that silver may be moving into a backwardation price structure on the Comex. It's not a pronounced backwardation pattern just yet...and it may prove to be temporary in nature, but it is notable, particularly when compared to the pricing pattern in gold. In any event, it is not a pricing pattern in silver that I've ever observed before...and I thought it important enough to bring to your attention."
"This is especially relevant since there are separate supporting factors suggesting the physical silver market is tight...and tightening. I've written recently about the Comex silver spreads tightening, with the nearby months gaining relative to the back months. This has continued, to the extent that there is now a slight premium [but a premium nonetheless] on the July 2011 contract...and all successive Comex deliveries. While the most actively traded months of March and May have picked up relative price strength to all other months recently, they are still at a discount to July."
https://www.caseyresearch.com/gsd/edition/gold-tsunami-coming
Dan 