Is Silver Breaking Away From Gold?Submitted by Chris Madcowski on Fri, 11/30/2012 - 04:41
I've been watching the price charts for silver and gold on kitco.com for probably 5 years or so now - at least since gold broke through $1000/oz.
One thing I've always, always noticed is that the price, in terms of U.S. dollars, for silver or for gold, has always more or less moved in tandem. What I mean is that if you were to look at the price for gold for any one day, and the price for silver for that same day, they were basically the same chart.
That all changed on wednesday.
Maybe I'm projecting. Maybe I'm seeing what I want to see, what I've been waiting and watching for for a darn long time.
See, I only own a little bit of silver myself, and luckily I was able to convince some close family members to get into gold for their big bucks and silver for some small transaction usages...
Before I could do this convincing I had to learn a lot, and one major thing I learned about was how the price of silver in terms of gold, and the price of gold in terms of silver, had been historically at one level, but lately it had been at another level.
Silver has been cheap, in terms of how many ounces you could buy with an ounce of gold, compared with what it was in the past.
The gold to silver ratio has been amazingly historically low at a rate of about 1 ounce of gold at $1700 able to buy you about 50 ounces of silver at $34 per ounce.
The charts show this ratio breaking up in the last 2 days, the first time it has gone for more than one day in a row in my recent memory:
Silver is going up and staying up, gold is going down and either staying down or not recovering. The ratio is breaking up. An ounce of gold will now buy 48, 47, even only 46 ounces of silver.
Is this huge or am I nuts?
We'll see what friday brings.