Gold/Silver Ratio – For All the Macro Marbles

Here is where we find out if the implications of this chart, the Canadian TSX-V to TSX ratio (daily) are real and lasting or soon to be reversed. We noted the break in TSX-V/TSX above the key SMA 200 in real time in an NFTRH update. It has now tacked on four more trading days at that status.

Why care about a ratio of one Canadian index to another? Well, only because it goes in positive correlation over time with the the CRB index and US inflation expectations, and by extension will help define the inflationary vs. deflationary macro backdrop in the months to come. Other than that, no reason I guess. Here is the long-term monthly view.

On another monthly view, the daddy of all my indicators, the Gold/Silver ratio has made an epic breakout to an extreme that would either radically alter the current system as we have known it (if it holds up) or bring the inflation trades to the fore (if it fails). It all depends on whether or not this breakout holds on the hard retest it is getting as silver has launched right in the face of silver bears.

gold silver ratio

As noted with silver’s false breakdown below 14, the precious metals often make final shakeouts before big bull moves. By the same token, I wonder if the Gold/Silver ratio above made a shakeout of its own (of the inflationists, getting them all beared up but good) by making that spike to an epic breakout. As the title says, these questions are for all the marbles. Gold vs. Silver, the “metallic credit spread” (Hoye). The breakout test is on right now.

silver price

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