12 June 2014

NAV Premiums of Certain Precious Metal Trusts and Funds - Gold/Silver Ratio - Dow/Gold Ratio

I suspect we will know when this long decline in this precious metals market is over when the Gold/Silver ratio drops to something less lofty than 65.

Even with today's big move, the metals have not yet broken the downtrends, but are bouncing off the bottom of a declining channel, at least so far.

But as those who study the longer term charts know, the June-July timeframe often sees an end to a secular downtrend in this long bull market in precious metals.

I suspect today's rally in the metals is due to weakness in stocks, and a changed perception in risk given the deteriorating situation in the Mideast, as well as the very weak economic results this morning.

But I do not want to lose sight of the theme that gold is priced in the West, but it is largely bought and sold in the East. And I suspect much the same can be said about silver.

When silver takes off, and the gold / silver ratio drops back into the 50's at least, we will know that the bull is more likely back.

We may also wish to keep an eye on the Dow/Gold ratio as well.