GoldCore Update: The Gold Silver Ratio Means Silver Remains a Compelling Buy

Gold
Gold has been as high as $1,127.50/oz overnight on dollar weakness but has since given up the gains in late morning London trading as the dollar has recovered its earlier losses. Gold is currently trading at $1,116.50/oz and in euro and GBP terms, gold is trading at €763/oz and £688/oz respectively.

Increasing risk appetite on hopes that the Dubai rescue bailout may alleviate the threat from the sovereign default is likely pressuring gold. Technically, gold fell last week and is near its monthly lows and momentum traders will likely further short the market but investor and central banks will likely continue to buy on the dips providing a strong underlying support for gold above the psychological $1,000 per ounce mark.

The gold market will also be keeping an eye on the latest central bank rate policy meetings (which get under way Tuesday and conclude Wednesday). The Federal Reserve, led by Chairman Ben Bernanke,  is widely expected to hold the federal funds rate at historic lows near zero percent. This will likely make the long overdue dollar rally of short duration and continuing record low interest rates will further support non interest yielding gold.

In the short term, as ever, anything can happen and it will be interesting to see if gold can rally into year end and finish above $1,200/oz. In the medium term, $1,500/oz is the next ‘round figure’ target and the continuingly strong fundamentals could see that figure attained by as early as mid 2010.

Silver
Silver dipped to $17.24/oz overnight but it has moved upward since. Silver is currently trading at $17.49/oz, €11.84/oz and £10.70/oz. With the gold: silver ratio at 65 ($1117/$17.10/oz), silver remains a compelling buy at these levels and will likely be the surprise outperformer in 2010 as it was in 2009 (up by more than 51% YTD as per table). Silver’s industrial uses should mean that the gold/silver ratio will likely gradually regress to the average in the last 100 hundred years which is close to 40:1. If the tiny silver market was to see real funds enter it than the ration could return closer to the historical average of 15:1 as it did as recently as 1980.

Silver remains less than half of its nominal record price in 1980 and very undervalued from a historical basis (see our recent research article on silver – http://www.goldcore.com/research/silver-set-soar-it-did-1970s).

Platinum Group Metals
Platinum is trading at $1,363/oz and palladium is currently trading at $364/oz. While rhodium is at $2,175/oz.

Mark OByrne

Also on news-goldcore-com

Videos

New Russia/China Gold Backed Currency Imminent

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

David Hunter Stock Market Prediction – DOW 45,000 In 2022

Blog posts

Central Banks…Why Bother?

Central banks…why bother? Inflation is here and it cannot be contained. US inflation is touching a 40-year high, the UK has hit the 40-year high, and the EU’s has already hit an all-time high. Figures of 8%, 9%, and 7% respectively are bad enough. This gives people strong enough reason to want to abolish central […]

READ MORE

New Russia/China Gold Backed Currency Imminent

We were delighted to welcome Simon Hunt to GoldCore TV this week. David Russell interviewed the expert economist and global observer to ask him about the Russia-Ukraine war, central bank tightening, and the future of the US Dollar hegemony. This is a sobering interview where investors will be interested to hear his take on market […]

READ MORE

Is Gold Starting to Behave Itself?

Gold is doing what it is supposed to do!  Equity markets are tumbling, “NASDAQ 100 Rout Erases $1.5 Trillion in Market Value in 3 Days” reads one Bloomberg headline. The big names such as Apple lost over US$225 billion, Microsoft almost US$200 billion, Amazon and Tesla each lost US$175 billion market value over the three […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

New Russia/China Gold Backed Currency Imminent

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

David Hunter Stock Market Prediction – DOW 45,000 In 2022

Blog posts

Central Banks…Why Bother?

Central banks…why bother? Inflation is here and it cannot be contained. US inflation is touching a 40-year high, the UK has hit the 40-year high, and the EU’s has already hit an all-time high. Figures of 8%, 9%, and 7% respectively are bad enough. This gives people strong enough reason to want to abolish central […]

READ MORE

New Russia/China Gold Backed Currency Imminent

We were delighted to welcome Simon Hunt to GoldCore TV this week. David Russell interviewed the expert economist and global observer to ask him about the Russia-Ukraine war, central bank tightening, and the future of the US Dollar hegemony. This is a sobering interview where investors will be interested to hear his take on market […]

READ MORE

Is Gold Starting to Behave Itself?

Gold is doing what it is supposed to do!  Equity markets are tumbling, “NASDAQ 100 Rout Erases $1.5 Trillion in Market Value in 3 Days” reads one Bloomberg headline. The big names such as Apple lost over US$225 billion, Microsoft almost US$200 billion, Amazon and Tesla each lost US$175 billion market value over the three […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE