Silver Jumps To Two Month Highs As Oil Reverts

Tyler Durden's picture

Silver has popped almost 2% today - its biggest jump in 3 weeks - as it nears its 100DMA. So what? It's still down notably from its Q1 swing highs but two things stand out to us as intriguing. First, oil priced in ounces of silver has seen a very narrow range of values since Bernanke's Jackson Hole speech in 2010 (QE2) when money-printing went full retard; and very recently the price of oil in silver had reached the upper end of that channel - and is now reverting. Second, the recent outperformance of silver over Gold has reverted the gold/silver ratio to its post-Bretton-Woods (1971) average at around 56x (up from a recent low of around 32x in April 2011). It seems there are stirrings in the real asset markets as energy and hard-money revert.

Silver outperforming Gold today...

As Oil priced in Silver begins to revert back to its post-Jackson Hole average - after touching the top of its range once again...

 

and Silver and Gold have reconnected in 'value' terms relative to post-Gold-Standard levels...

 

Charts: Bloomberg