CPM Market Commentary: Gold:Silver Ratio Realities

November 20, 2018

I know not everyone likes what the CPM Group has to say on the metals markets but I think it is high quality work. The latest piece below addresses the gold:silver ratio and how all the PM bulls point to the current level as a turnaround spot.

Here’s the preview to the CPM Group research…

Silver people keep talking about the gold:silver ratio. The ratio is around 85:1 on a spot basis as this is being written, having averaged 85:1 in October. Commentators, producers, and others keep saying that whenever the ratio has gotten to 80:1 in the past it has quickly reversed and fallen sharply as silver has gained value relative to gold.

That is almost true.

There was an important period of more than three years, from August 1990 until November 1993, when the ratio reached 80, blew right past it, rose to 100, and stayed above 80 for maybe five years. Just because the ratio is above 80:1 and a great deal of people are desperate to find reasons to say they are bullish about silver, there is no reason to believe that this ratio will soon fall sharply.

In fact, the experience from 1990 through 1993 is very important, and bears important warnings about the current situation in silver prices. There are similarities between the two periods which could bode ill for silver prices.

Click here to read the full report.


    Nov 20, 2018 20:49 PM
    Nov 21, 2018 21:08 AM

    Plunger is right about the following and we’ve seen it over and over again:
    “A bottom occurs when virtually everyone turns bearish. I know what you are thinking…you’re thinking: “I am paying these guys money to tell me this?” Jeesh everyone knows that! But let’s dissect that comment. If almost everyone is bearish then that means everyone thinks prices have further to fall. This requires that virtually all bottoms occur before or even well before everyone thinks they will. Let that sink in for a while.”

      Nov 21, 2018 21:18 AM

      Here’s an example (and Tanashian -as he will tell you- is usually a little better than most of his counterparts):

      Nov 21, 2018 21:13 AM

      The fact that bulls like you have been calling the supposed bottom for 2 years now, and that you are still at it, speaks volumes.

    Nov 21, 2018 21:36 PM

    You are wrong, spanky – Mr AMZN to the moon. Lol!!!

      Nov 21, 2018 21:15 PM

      AMZN just made contact with its 50 WMA this last month after almost 3 years and isn’t event 10% away from that moving average today. It’s 50, 100 and 200 WMAs have been strongly bullishly aligned for almost 9 years. How are your silver stocks doing?

        Nov 21, 2018 21:16 PM

        You’re twisting things as usual. You were saying that AMZN would never pull back more than 5% because “they” didn’t want it to fall (an idiotic notion, btw).
        As for my lows, I will keep calling them as they happen — and they happen all the time, fyi. ‘Round and ’round it goes, spanks. Learn to sell strength.