The Silver/Gold ratio continues to flash positive, short-term (ref. NFTRH 750)
The Silver/Gold ratio (SGR) is an indicator favoring inflation and cyclical markets when it is rising. Recall that it was a primary reason for becoming constructive on a commodity bounce and still constructive broad market backdrop with its recent rise in contrast to the supposed doom and gloom of the banking “crisis”.
In this case, it worked as a negative divergence to the would-be deflationary pressures of a would-be banking meltdown. Were it really an immediate crisis, it would have typically favored gold over silver.
As of this afternoon, the SGR has taken out the converged daily SMA 50 and SMA 200. I’d hesitate to call it a new and long-term bull move in the SGR, but it could be a guide about how long to remain constructive on the broad rally and especially commodities. When silver tops out in relation to gold it could be time to get very defensive across markets. But let’s just manage a chunk at a time. On this chunk, SGR is going to plan.