Silver would lead… and it is

Get ready for some lathered up Bugs…

From NFTRH 677’s Precious Metals segment:

Once again the micromanagement was done at last week, and so we can stay streamlined in this segment. The reminder is that the macro backdrop is not and has not been favorable for gold or gold stocks. A wild card would be if silver starts to out-perform gold and the sector gets the inflation bid along with everything else. Here is that indicator, shown taking out the SMA 50 on Friday. It’s a start.

silver/gold ratio

As for silver and as noted in the Trade Log last week, I added SLV and prefer it rather than the higher risk and potentially better reward of individual silver stocks. Silver moves well enough if it really is going to get an inflationary bid. I’ll stick with that for now.

Silver futures are busting through resistance this morning and if you look closely you can surmise the next objective. This is the expected bounce and the way silver rolls and considering precious metals sentiment in September we’ve anticipated a stronger bounce than previous for not only silver, but also the gold mining sector. But with all that resistance traffic above well, you know..

silver price (futures)

Side note and of positive near-term effect for the inflation trades, here’s what’s happening to the Silver/Gold ratio as the forces of liquidity destruction (Gold/Silver ratio & USD) move further into retreat while Wayne and Garth (and I might add, the TSX-V) party as only our neighbors to the north can when they get feeling good and speculative about inflation.

silver/gold ratio

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