Gold/Silver ratio

I'm glad to see a bump to this thread. This is where I see some real insight.

 

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Just around the corner.

 

I have a thought on this topic of "ratios," but not completely sure how to express it. I will give it a try.

These are some of my thought: Maybe the purpose, the benefit of the discussion on ratios between gold and silver, is to remind the market/us that manipulation/old ways of managing these commodity are still in place.

When the thought of ratios, as we have known it, are no longer conceivable, it will be then that we have entered the space that will be revealing to what silver, or gold, or silver and zinc is at a given time and phase of market discovery. (I still wonder why zinc is not on the radar screen yet, but that is a topic for another thread).

That's all.

 

Gold 1365, Silver 27.75. This puts the ratio at 49:1. Wow! I thought we would get back here, but now it is starting to look like things might be over correcting. This could be normal, as you can't push something too far in one direction without it swinging back harder than it normally should.

The reason the silver to gold ratio is important, and say more important that silver to zinc, or silver to oil, is because 90% of the price action of silver is attributed to price movements in gold. Hardly ever do you see gold dropping $100 an ounce at the same time silver is gaining $2.....this just doesn't happen. Have you seen gold go down while oil goes up...sure. Have you seen zinc go up as silver goes down, definitely. But gold and silver track each other.

So, why the strange 80:1 ratio we saw earlier this year and last year? Market manipulation? Who know. But it was obvious that something in the ground on a ratio of about 20:1 shouldn't be selling for 80:1. Its just common sense.

There is something going on right now that is forcing this correction.....entities are taking physical delivery of their silver instead of leaving it with COMEX and holding a silver paper contract. In June there were about 110 million ounce of silver in COMEX to cover 600 million contracts. Recently, there is about 100 million ounces of silver in inventory to cover 725 million contracts. COMEX is doing all it can to satisfy it's obligations to fill these contracts with silver delivery when asked. The day they opt to use cash to settle the contract is the day silver soars!

 

People that had a large amount of money bought into gold to protect their assets.
Now, your seeing the trickle down effect where the "common man" is losing confidence in our economy, and buying the only thing they can afford..... silver.