Inflation Trade: Gold Lags, Silver Leads as Expected

Posted at Gold-Eagle…

Inflation Trade: Gold Lags, Silver Leads as Expected

Finally we have movement in the precious metals sector…but unfortunately for gold cheerleaders, the movement was in the ‘inflation trade’. If you are looking for excitement about gold during inflationary phases, please look elsewhere because my articles are not going to satisfy.

Amid the hoopla of spiking US Treasury yields, spiking inflation gauges like the 10-year breakeven inflation rate (along with the TIP/TLT & TIP/IEF ratios), spiking Industrial metals and yes, spiking silver came this lame response by gold [see article for chart]; a sag toward the 50-day moving average. This is as it theoretically should be.

The thing is, silver’s leadership was only an impulsive 3 day shot higher and it has not broken the downtrend as indicated by the 200 day moving average. But as was the case in Q1 2016, it may be a start. Regardless, the spike in the ratio was consistent with the hard spike in the various inflation trade plays and indicators that popped last week.

silver/gold ratio

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