Chart of the week: silver is due to outshine gold

When gold rallies and is set to keep performing strongly, silver often does even better: it is also a traditional store of value, and because the silver market is smaller than its gold counterpart, it is prone to sharp ups and downs. The gold/silver ratio tracks the relative progress of the two monetary metals by dividing the silver price into the gold price, revealing how many ounces of silver it takes to buy an ounce of gold. The ratio is now suggesting that silver has some catching up to do. A few weeks ago it reached 88, the highest reading in nearly 30 years. The last time it reached a similar level, in early 2016, it slid by nearly a quarter as silver outperformed gold, notes Matt Simpson on City Index. A similar drop now would imply a decline in the ratio to below 75.

“If the EU project were a ship, it could plausibly be the RMS Titanic. How else to explain the actions of political ‘leaders’ who, having hit the iceberg called Brexit, decide to hit the accelerator in the same (wrong) direction? The Financial Times reported last week that Brussels was considering a €100bn sovereign wealth fund to finance ‘European industrial champions’ to compete with the likes of Apple… ‘Europe has no such companies’, says the document… This presents a risk to growth, jobs and to Europe’s influence in key strategic sectors’. Putting aside the wisdom of the centrally planned growth strategy that served the USSR, China… and North Korea so well, [surely]Brussels [has] better things to do with other people’s money, given the looming insolvency of… the eurozone banking sector – due to the European Central Bank’s insane monetary policy.”
Tim Price, Price Value Partners

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