Gold-to-Silver Ratio Soars By Most In 2012

Tyler Durden's picture

From the open of the US equity market day-session, gold and silver have diverged aggressively. Gold is notably outperforming silver - in fact today is the biggest jump in the Gold/Silver ratio of the year. The Gold/Silver ratio has also retraced upwards to its 50DMA. It seems there is overall pressure on precious metals post-Bernanke but the relative preference is for Gold so far.


From the start of the US equity day-session, gold and silver have diverged...


Gold/Silver ratio jumps by most in 2012 to catch up to its 50DMA...


Charts: Bloomberg

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edwardo1's picture

All you folks looking for " a huge drop" in the price of gold, in particular, need to understand something:

1.) Just as the monetary authorities don't want physical to go up too much too quickly, neither do they want it to go down too much lest physical go into hiding.

With that in mind, if you are waiting for prices to go below the lows of earlier this year, don't hold your breath.


devo's picture

Crazy that a metal in backwardation can go down 4% in one day.

I see silver as the buy of the decade so I'm hoping it dips into the 20s.

AgShaman's picture

Dear Keynesian Shylocks,

A sale tomorrow would work out nicely for my schedule.


"Joe Bag-of-elements"

Bansters-in-my- feces's picture

Silver down over 3%....
Lucky it's a natural move and not manipulation by the USA Gov.&friends.
Fucking terrorist.

ozzz169's picture

I hate this technical analysis crap, some please tell me why a 50 dma is more important then a 51 day or 55 day, and same with 100 day and 98 day, its always crossing some moving average, and picking some arbitrary day because its a nice round number is just pure random and stupidity.  and because you get 100,000's of morons using the same round number it somehow makes it significant?   And now we have computers programed to arb these idiots.  they analyze the data faster then these "technical" analisist can and beat them to the punch then get out before they can see a change.  so what you should do is use a 51 day and 49 day, and a so on so you can see it before the guy looking at the 50 and beat him to the punch, and make sure you dont miss your classic "head and shoulders" pattern. 

NotApplicable's picture

For someone who hates technical analysis, you've sure done plenty of it in that post. :D

Orly's picture

"...why a 50 dma is more important then a 51 day..."

Because everyone uses that number and the 100 and the 200.

But unless you're using an MA in conjunction with another MA, either shorter or longer, then MAs by themselves are pretty useless.  All it shows is a general trend in the chart and if you can't see that, you shouldn't be looking at charts anyway.  They come in handy for MA crosses to signal when the market may change trend.

The algos that are running also seem to be designed to keep the MAs nice and uniform so that there is no massive break in continuinity...until there is.

Also, the classic head and shoulders pattern is very rare in charts and I will again take this opportunity to get on my soapbox and state that head and shoulders patterns are a form of "mesa;" a table.  Flat, with a bump on one shoulder, a flatline, a head, a flatline and a bump for the other shoulder; keyword there being, "flatline."  From one shoulder to the next, they are nearly identical in price level.  I now stand down.


Tuco Benedicto Pacifico Juan Maria Ramirez's picture


Today's losses in the metals markets have been caused by the 47.572-day cycle exponentially-smoothed RSI crossover ratio stochastic variable Bollinger-band flow-channel indicator reaching a second-derivative Fibonacci inflection point.





ejmoosa's picture

I am happy to get rid of my paper currency for silver and gold.....the paper will be worthless when the shit hits the fan. 

Freddie's picture

SkyNet will find you.  People voted for this in 2008 and 2012. 

Bastiat009's picture

And in 2004, 2000, 1996, 1992, 1988, 1984, 1980, 1976 .... you get the picture.

DosZap's picture

 Sure, gold is a good preserver of wealth, but you'll need someone verify/assay it in order to sell or trade it.

Where did u get that crazy idea?, stick w/coins of the realms, and no worries mate.Eags/Mapes/Roos/Krugs.

Now Silver unless it's Mapes or Eagles,and Kookaburras,Libertads, etc, are another ball game.

Now bars,is a whole nuther ballgame.For both.

I think folks paying a lot more in prems for Eagles(Gld) are missing a double play, odds are better n even the dollar sites out before the Canadian,or Aud currencies do.

A. Magnus's picture

"Where did u get that crazy idea?, stick w/coins of the realms, and no worries mate.Eags/Mapes/Roos/Krugs."

You do know there is a Chinese company that makes Tungsten filled, gold plated 'replica' rounds, right?

DosZap's picture

A. Magnus

Yep, so they say, and my dealer is huge,and the MAN say's that there is so little of that out there it is not worth even thinking of.

You can tell by sound what is real and what is not.When I go in to sell it they look at it, and don't even think of weighing it.

Have you tried to order any of that site?, if not pls post a link I want to order some, just for testing(the site Chinese I saw that advertised them, when I asked about pricing, they backed off real quick, and tole me any coin with raised lettering/faces etc, they could not duplicate.(after their site said Krugs were the easiest to make).

Basically I called em on it, OK I wanna buy some........3 weeks to respond, and told me no can do.

I have heard/seen not one instance of coins of the realm,filled w/ tungsten.They Tungsten blanks will shatter if subjected to the tonnage required to properly mint them.

Bars, another game.

AgShaman's picture

Sunshine is now using a hologram anti-counterfeit feature on their gold and silver bars.

It's pretty "trick" actually.

Anybody that understands gold and silver will not be bothered by the scare tactics that are floating around.

so yeah, agreed Dos Zap....the usual suspects are the "preferred" offerings

but when people force themselves to get educated about all that's offered in the realm and shuck their fear....

There's lots of options to be had

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Buybacks for one ounce gold american eagles are much higher than for GMLs or GKRs.  That must be taken into consideration.  Spread (difference between customer buy and sell price) for GAEs is reasonable.

Oh, fake one ounce krugerrands pop up every now and then.


DosZap's picture

Tuco, as there should be,since the prems are double.

devo's picture

Any opinion on the 1.20oz Mexican Pesos?

To me they're the "junk silver" of the gold world. Also beautiful to look at.

DosZap's picture

Any opinion on the 1.20oz Mexican Pesos?

To me they're the "junk silver" of the gold world. Also beautiful to look at


Yep sure are,just like old style silver libertads, the 50 Pesos are 90% pure.

Only issue w/them is MOST folks of the world want min of 22k, and 90% doesn't make it.

But for premiums, and best buys, the 50 Peso restrikes are GTG(IMHO)

One of the best deals on the NET is running at the top of the page(mine anyway), $39.90 over spot for Mapes.( I pay less than that when I buy, but not much less)

There is a shortage of them, as the Canadian Mint has had sales like we have on them, compared to the Eagles.

I refuse to pay a $70+ prem on an Eagle.(not when I can get 24k for half or less that.

devo's picture

GTG meaning good to go?

I believe the pesos were the best selling gold coins before Krugerrands hit the market. I have a bunch of them, just wondering if it's worth trading them for finer gold or not. (I'm thinking not worth it, but would like to hear some other opinions on it).

dragoneyes74's picture

The action in gold and silver is troubling.  Long-term I think there's huge upside, but that isn't going to happen until big money abandons bonds and the dollar to chase hard assets, thereby driving the physical price upward because supply will be running out.  But that's an end game move. 

In the meantime, it seems the buying capacity of the longs is running lower and lower.  The 2011 high in silver was a short-covering rally because it was the first time we went that high in 30 years and it was driven by QE2 (and going back further QE1), but also the Middle East uprising and the Japan tsunami/nuclear meltdown.  That kept forcing shorts to cover and momentum longs to jump on, making a crazy run that is probably not going to happen again (until the end game).  When it was flirting with $50 I'm sure there was some kind of collusion to raise margins like they did to crush the market.  After bottoming at $32, silver then retracted to $44 then got crushed again with the Twist announcement of Sept 11'.  I bet a lot of those heavily long started losing money in this volatility.  Silver then bounced off $26 and retraced to $37 then got crushed again down to $26.  Each time the longs must get less confident and many take losses, I'm sure, some of that buying capacity never to return.  Now we retraced back up to $35 in anticipation of QE3 but it was overbought and sold off deeper than it should have.  That was a red flag.  Then it retraced up to mid $34's and got crushed again.  Every dip got bought except last week there was one day silver got crushed with no dip buying.  That was another red flag.  Yesterday was a big red flag.  We are nowhere near overbought and Bernanke announced the most bullish-for-the-metals policy ever and we had a weak burst, a crush, another burst, and selling ever since.  

So, the question is: where does the buying capacity and catalyst come from now?  I'm not saying it's over for the metals by any stretch.  But I don't see how we make any sizable move if no one is buying right now following that announcement.  What's the catalyst that will drive the buying if QE4 didn't?  I wouldn't be surprised to see the selling drive us down to $30 where we better find support, and if we do and the bottom is well-timed with some kind of resolution to the f-cliff (by pushing the pain out) as well as raising the debt ceiling, the dollar should finally start trending down, which will allow the metals to slowly trend up.  But I don't think silver will have the legs to get past $37 by the time everything falls apart.  Then it will get smoked with everything else.  THEN, I hope, when all hits the fan, we will get the exponential rise in silver that we expect because the end game will be upon us and there will be a flight away from paper.  But I believe there has to be a 2008-like trouncing first.   We'll see how this plays out, but this isn't promising action in the metals right now.  

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Good analysis Dragoneyes.  Thank you. 


A. Magnus's picture

"But I believe there has to be a 2008-like trouncing first. We'll see how this plays out, but this isn't promising action in the metals right now. "

Patience grasshopper - in the late 70s gold was hammered down by nearly 50% a year or two before it kicked into parabolic mode. Remember the market can stay irrational longer than you can stay solvent...

A. Magnus's picture

"But I believe there has to be a 2008-like trouncing first. We'll see how this plays out, but this isn't promising action in the metals right now. "

Patience grasshopper - in the late 70s gold was hammered down by nearly 50% a year or two before it kicked into parabolic mode. Remember the market can stay irrational longer than you can stay solvent...

Mi Naem's picture

"What's the catalyst that will drive the buying if QE4 didn't?"

Some, like myself, are expecting/hoping precious mets to go significatly lower again, at least one more time. 

It looks like the metals market hasn't completely disconnected from equities yet.

I'm double shorting the S&P, and when equities move down, again, I'll be buying more metal on profits from the shorted equities market.  

I hope to catch more silver around $28 or less, and gold around $1300's.  However, whenever the next S&P correction seems to bottom out, I'll buy more metal and probably other commodities.  

That's the plan anyhow. 

And, I think I'm not alone: There's a pretty good amount of money in the shorted ETF's. 

devo's picture

Supply/demand dynamics, investment demand, adversion to counter-party risk, and uncovering manipulation. I don't know if inflation will drive prices higher since the FED removes anything that shows inflation from the CPI. For inflation to drive prices the public will have to distrust the FED, and sadly most still trust their numbers.

All I know is I'd rather have silver than dollars, and nothing will change that moving forward. If they're giving me more silver for dollars I will take it. Bank error in my favor.

blunderdog's picture

Silver's hecka lot trickier than gold, 'cause it's still mostly an industrial metal, and industrial output is taking a beating.  Global depression and tanking BDI should mean reduced silver demand as a material, but teetering financials should mean increased respect for silver as a PM.

I'd suggest better to put as much as you can stand into gold and play with silver opportunistically.  It's like a cork atop a wave--VERY unpredictable price action.  Gold's more like a heavily ballasted ship.

Xanadu_doo's picture

..."But I don't see how we make any sizable move if no one is buying right now following that announcement."...


Umm, I think I know where you can find lots of people who are buying right now.

Without going too far even...


tmorris's picture

The only ones selling are the US specilators and manipulators.  The rest of the world is buying and those natural forces will in time overcome the macinations here in America!!

lemonobrien's picture

the difference between golds and silvers is the difference between an ugly bitch, and sweet, fine, poontang.

MrButtoMcFarty's picture

I disagree sir!!


Jenny McCarthy v Selma Hayek

I love Jenny in a filthy bent over the couch wheeling and dealing sort of way....

But it's Selma I wish to make my wife.

SAT 800's picture

I couldn't say really; I always specialized in beautiful poontang; I don;t have your experience to speak from about ugly bitches.

DowTheorist's picture

In spite of my being fundamentally bullish very long term (secular) for gold, I cannot ignore the technicals.


Short and medium term (until ca. 6 months), a rising gold/silver ratio tends to denote bearishness for both metals, even though gold declines less and hence outperforms.

Furthermore, the BLV/GLD (long-term bond/gold term bond/gold) ratio refuses stubbornly to turn bearish (stronger gold). A bullish ratio is acting as a brake for gold. Until the ratio turns bearish (stronger gold) gold will be subdued. More about this vital ratio here:

More worryingly, gold and silver are caught between the Oct 4 highs and the Nov 2 lows. A breakout above the Oct 4 highs would re-confirms the primary bull market. However, the violation of the Nov 2 lows would trigger a primary bear market signal. Right now, gold and silver are dangerously approaching the Nov 2 lows. More about the Nov 2 lows and its relevance here:




devo's picture

Bear market? Come on now.

Gold will have a $50 move in early January and obliterate all this "wall of worry" nonsense.

SAT 800's picture

You cannot ignore the technicals? That sounds like some kind of psch. disorder; you ought to have that looked into. Metals prices follow technical indicators like gang plows follow prayers; not too good.

SAT 800's picture

Silver in the Zurich Vault; $32.72/ right now. it's not for everybody; but it's not a scam, either. it's all real, itis all there, and it's all yours.

jomama's picture

if you're not holding it in your possession, you don't own it.

how difficult is this concept?

SilverMoneyBags's picture

Metals are crashing because nation after nation keeps being downgraded. Robert Prechter is probably right. No amount of printing can save anything and prices will go towards 0, not infinity.

reinibe's picture
A rising Gold/Silver-Ration (from the lows) pointed 2012 always to falling Gold prices! Chart:

silverdragon's picture

They keep supressing the price of Silver and the trolls keep saying it will go down but I bought at 18 and its almost doubled even while they suppress the fuck out of it. Fuck you, all you sad pathetic trolls, get a real job. Hope you trolls are smart enough to buy Silver even though you are being paid to trash it.