A rising Silver/Gold ratio (SGR) would be positive for the global equity ‘anti-USD’/inflation trades, including several US sectors, commodities and the precious metals.
For the first time in over a month the SGR is jumping above its EMA 20 today to fill the gap created by whatever drove it down at the end of August. I am still long SLV and as long as preferred gold stock fundamentals do not come in line, am a better holder of metals, especially silver, than those that dig them from the ground. Silver gets the inflation bid relative to gold.
Right now all of this stuff outside of the ‘at risk’ US stock market (with its up trends and higher targets) is only indicated to be on a bounce. But I did give DBC a shot yesterday, replacing gold miner Kirkland Lake (KL) with it after a profit take yesterday. The pattern targets a marginal new high.
But I am not a commodity bull because there are some real crosscurrents in the interest rate and by extension, inflation markets. Long-term yields have bullish charts, but sentiment & CoT beg otherwise. Every dork with a charting package is bearish on bonds (bullish yields) now. One guy even managed to somehow make our Continuum ™ seem like his own. Coincidence I guess.
But please do read this update (now public as part of NFTRH’s 10yr anniversary festivities). It’s important to the upcoming macro environment in which all your holdings, long or short, exist.
There is a consensus building out there and if that consensus is wrong (like everybody on one side of the boat, according to sentiment) then you’re gonna be rudely surprised if you go full frontal inflationista and stay that way.
So for me everything’s a trade right now. Silver (no pun intended) lining? If things do not go according to the inflationitas’ plans, a major gold sector buying opportunity would be in play.
I know it sounds like a lot of ifs and buts, but that’s the markets we’ve got my friends. If I could make it simple, I would. But read that update linked above and at the very least, think about herds and how often they tend to go over cliffs, eventually.
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