New York (MarketWatch) -- Gold drifted mostly sideways last week. But investment letters report major, maybe meaningful change, below the surface of the precious-metals pond.
This means the indexes are up about 102% since their late-October lows. They are virtually at their 2009 highs.
Gold watchers have traditionally viewed gold equities as a leading indicator.
But what has really got the gold letters excited is silver. Unusually, it defied the gold example and rose 4.5% to a new high for the year: $13.155 for the nearby Comex contact.
In a real bull market, the silver/gold ratio generally falls. That seems to be is what is happening now.
As James Turk puts in his Freemarket Gold and Money Report: "Last year, the gold/silver ratio repeatedly tested overhead resistance in the low 80s ... The ratio closed on Friday at 69.5. So from its highest peak the ratio has dropped 17.6%, which is by any measure a very healthy gain achieved in less than four months."
Turk goes on to predict the ratio will go to 40 and eventually see the 1980 extreme below 20. Given the current gold price, this implies a silver price of $45.
*Silver is still very undervalued right now, with the price at roughly $13 per ounce, even a Filipino investor can secure true money for himself and his family. Insure against funny money now and be prepared.
No comments:
Post a Comment