Thus should you be casually queried off-the-cuff as to the present price of Gold, your simply responding “1850” without nary a thought ought be fairly spot on, impressively making you appear as one “in the know.”
But year-to-date, the precious metals story (albeit somewhat stealthily) is Silver. For have you been watching the Gold/Silver ratio of late? We have as it has its own dedicated cell on our key screen of live data. Which is why for the first time “in forever” we of a sudden sat bolt upright this past Thursday in taking notice of said ratio being sub-70x!
“Is it live? Or is it Memorex?”, (i.e. on tape from nearly four years ago). For that was the last instance of the Gold/Silver ratio being below 70x: 17 April, 2017 at 69.9x. Fast forward that tape to today and the ratio is now 68.4x.
The millennium-to-date average of the Gold/Silver ratio is 66.2x such that ’tis fair to say these two precious metals are well within a standard deviation of having returned to being on “par” with one another. (For those of your caring to include a full generation prior, said average ratio as dated from 1975 is 59.7x). Either way, here’s the daily graphic across these past twenty years (plus one month) of the Gold/Silver ratio with its average as having evolved throughout:
Indeed peeking back to The Gold Update of 04 April 2020 (“Gold Losing A Gear As Markets Are Losing their Fear”), we therein penned: “…the Gold/Silver ratio … [is] a staggeringly high 113.5x, nearly double the millennium-to-date average…” On that date, the price of Silver was 14.53: today at 27.06 ’tis +86.3% since then; (Gold across the same time frame is but a comparable +12.2%).
Hence the race back to a more realistic reading. And clearly ’tis not because of any fallout in Gold. Rather, ’tis due to Silver finally garnering long-overdue committed notice by getting much more of a bid than has Gold in recent months. Even for just this brief year so far, Gold is -2.7% — in last place by the BEGOS Market Standings — but Silver in second place is +2.0%. Here’s the table with 2021’s first trading month officially in the books:
‘Course Oil +7.7% is the big winner thus far in 2021, clearly being cushioned by the nixing of new StateSide energy facilities, (the void of which hardly shall be filled by substantive “green” sources perhaps for decades). But again as to Sweet Sister Silver’s outlook for the balance of this year: should the Gold/Silver ratio of, let’s say 70x, be maintained and Gold touch our forecast high of 2401, that mathematically would see Silver at 34.30 … “Got Silver?”
As for the present we’ve got Gold by its weekly bars from a year ago-to-date, price’s churning nonetheless keeping the relatively fresh parabolic Long trend intact, its fourth blue dot appearing as shown. But priced at 1850 with the “flip to Short” price at 1779, such distance of 71 points is basically the same of that portrayed a week ago, which given the present “expected weekly trading range” of 70 points still finds this Long trend technically subject to being short-lived.
In fact, despite the turbulence in the S&P 500, Gold’s “expected daily trading range” (per its website graphic) is actually narrowing a bit (31 points at present). Yet, notwithstanding Gold’s churn, both the weekly parabolic and linear regression trends remain to the upside:
As is our month-end tradition, let’s review Gold vis-à-vis key precious metals equities from this time a year ago. So per the following chart we’ve (in ascending order): Agnico Eagle Mines (AEM) +15%, Gold itself +18%, Franco-Nevada (FNV) +21%, the VanEck Vectors Gold Miners exchange-traded fund (GDX) +25%, the Global X Silver Miners exchange-traded fund (SIL) +42%, Newmont (NEM) +46%, and Pan American Silver (PAAS) +57%.
The mild downside bias across the entire group from last summer onwards belies the benefit from the inevitable monetary printing waiting the wings. Again, we’ve mused about it being already priced in … but mathematically it really has not, simply by the opening Gold Scoreboard’s valuation today of 3721. “Got Gold?”
And here is additional impetus for higher prices of Gold and Silver, the cutting-edge Dow Newswires having figured out that the “U.S. Economy Shrank in 2020 Despite Fourth-Quarter Growth” Who knew?
Further, ’tis said China has surpassed the U.S. in attracting direct overseas investment, albeit the…
Read More: Gold Churns but Silver (Finally) Returns!