The Gold/Silver ratio reversed from down to up on Friday, a ‘tell’ of sorts
Gold/Silver ratio (in its Brooklyn accent): “Slowly I toin… step by step…”
I shorted silver on Friday as a speculation and with a bit of an uneasy feeling, because the chart was so obviously not good. From Friday’s Trade Log…
Today the silver price is following through on the downside reversal and breaking down. Don’t worry silver bugs, it’s all within the context of a still positive big picture. But for precious metals traders/investors, a washout is often the climax to extended corrections like we’ve had since May.
This view is affirmed by the spiking Gold/Silver ratio, which often impales the gold stock sector as inflationists and silver bugs go “RUH ROH… wrong again!”. The GSR is poking the grimacing face emoji today and that is step 1 toward a liquidity event on the macro. Tensions are rising. Step two, Mr. Poop face lay in wait. Best of all, the GSR is coming into sync with the US dollar, which has obviously been bulling since July.
A negative macro event – if it plays out per these initial signals – will bring big time opportunity. What the average bug does not get is that it is the deflationary clean outs to sanitize the macro from which the best trades in the gold mining sector come. As USD rises and gold out-performs other assets/markets (including silver) the real * fundamentals will come in line. But you’ve got to be prepared, eh? We (NFTRH) are prepared.
* As opposed to those all too often and prominently imagined by thought leaders (ha ha ha) in the gold community.
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