On March 22nd 2016, I mentioned:

“As of two weeks ago, gold prices had outpriced silver to a ratio of approximately 83- a ratio which was higher than gold’s peak in the height of the financial turmoil during the Financial Crisis (Nov. 2008). It should noted that Gold then fell against Silver to around 32 by 2011.”

Since that point in time, the ratio has dropped down to approximately 73.70, and silver had its best day in 6 months.  A good trade for the individuals who entered into the market on the short side (short gold/long silver.)

Care is advised for the next 2 to 3 weeks. Not only is it unlikely that the markets would bounce of the exact level (though it may happen), the trade is becoming mainstream.  Gold may now well reverse direction against silver, and if so it will do so rapidly.

I would advise against shorting gold in silver terms at this point in time.  A neutral, or reversal stance would be prudent going into next week.


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