Gold/Silver ratio continues to diverge inflation trades

Gold (more counter-cyclical, less inflation-sensitive) vs. Silver (more industrial utility, more inflation-sensitive)

It’s not my bias speaking. If we’re going on a von Misesian crack-up party boom, all getting rich on the great “commodity super cycle” (that’s a hype term) I’ll go that way. But there have been several divergences on the fly in opposition to that notion. Primary among them…

The Gold/Silver ratio (GSR) has diverged the inflation for a year now.

It was also a year ago, right when silver started losing its mojo (and momo), that the hairbrained #silversqueeze promotion was inflicted upon naive participants as this authoritative sounding source (who not surprisingly has me blocked on Twitter) put out an official statement, making it sound really, you know… official. A silver bug warming over the old Reddit/meme stonk ‘forced short-covering’ fad and signaling a year-long (and counting) downtrend for gold’s little bro. It as a fabulous #failure.

“Gold Ventures have spoken”… yes, it has and I for one will not let these official words be forgotten. By the way, it’s genie out of the bottle. A ghost can go wherever it wants last I checked.

But back on track, the point is that gold is still out-performing silver despite a year+ of overt inflation headlines and associated trades. That means something. The inflation could get out of hand, especially when considering charts like the one below.

But everybody knows what’s in play and yet the GSR and other signals continue to diverge even as the inflationary headlines have never been louder and the Fed gets jerked into ultra-hawk mode.

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