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Silver and Gold will move in opposite directions in 2011
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<p>[QUOTE="Cloudsweeper99, post: 1073093, member: 3011"]You aren't confused. You understand the situation perfectly. The ratio is just another bit of nonsense that folks have invented to give them the illusion that they understand the market. In reality, gold and silver are two commodities with different characteristics that move the prices up and down at various rates. It would be just as meaningful to construct a gold/oil ratio since both respond to inflation, or a silver/timber ratio because both respond to the economy. Any ratio that fluctuates between 10 and 100 is a pretty bad predictor of anything. It could go to 1:1 or to 200:1 or anywhere in between from here with about equal probabilities. But some people will say the ratio will contract, some will say it will expand, and half of them will be correct and imagine they understand the market without quite realizing that they are just predicting a coin flip.[/QUOTE]</p><p><br /></p>
[QUOTE="Cloudsweeper99, post: 1073093, member: 3011"]You aren't confused. You understand the situation perfectly. The ratio is just another bit of nonsense that folks have invented to give them the illusion that they understand the market. In reality, gold and silver are two commodities with different characteristics that move the prices up and down at various rates. It would be just as meaningful to construct a gold/oil ratio since both respond to inflation, or a silver/timber ratio because both respond to the economy. Any ratio that fluctuates between 10 and 100 is a pretty bad predictor of anything. It could go to 1:1 or to 200:1 or anywhere in between from here with about equal probabilities. But some people will say the ratio will contract, some will say it will expand, and half of them will be correct and imagine they understand the market without quite realizing that they are just predicting a coin flip.[/QUOTE]
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