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Silver Gets Hammered As Gold Goes Higher

Hi Eric,

You seem to be one of the only people who analyze the silver market in an intelligent manner.

On Friday the Gold/Silver ratio shot higher as gold was bid up and silver was dropped like a rock.

What is your current take on Silver?

Best regards,

Mike

For a discussion on the gold to silver ratio please review Gold to Silver Ratio: Hemorrhage or Injection Phase within the Depressionary Box

So the real question is does yesterday's action represent a change in the trend? From a long-term term perspective, did yesterday's rising in gold and drop in silver suggest the beginning of a new hemorrhage phase?

Long-term Gold to Silver Ratio:


While transitions from liquidity injection to hemorrhage phase tend to abrupt, they usually occur at or near significant cycle dates. The March 2009 low looks solid, so a transition into from liquidity to hemorrhage, right now, would be a cycle inversion. This is not only rare but would portend bad things. As a minor June cycle date approaches, it is more likely that today's weakness in silver will be met with unexpected strength during the summer, but that's hardly an easy sell into today's fear.

If downside force continues to wane in stocks and the flash crash lows and bond market highs cannot be broken on a sign of strength, the probabilities favor out performance of silver throughout the summer.

The stock, bond, and currency market must be watched closely into June for clues about future direction.