• 94 days Could Crypto Overtake Traditional Investment?
  • 99 days Americans Still Quitting Jobs At Record Pace
  • 101 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 104 days Is The Dollar Too Strong?
  • 104 days Big Tech Disappoints Investors on Earnings Calls
  • 105 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 107 days China Is Quietly Trying To Distance Itself From Russia
  • 107 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 111 days Crypto Investors Won Big In 2021
  • 111 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 112 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 114 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 115 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 118 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 119 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 119 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 121 days Are NFTs About To Take Over Gaming?
  • 122 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 125 days What’s Causing Inflation In The United States?
  • 126 days Intel Joins Russian Exodus as Chip Shortage Digs In
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Silver, Gold and The Coming Deflation

Historically gold has made its significant gains, relative to other assets (as well as nominally), not during inflation, but during deflation (Note: I am using the terms inflation and deflation very loosely in this case). These significant gold rallies historically occur when value flees instruments such as stocks and certain commodities.

Since the 1920s there have been three major gold rallies (1930s, 1970s and the current rally).

All three major gold rallies came after a significant top in the Dow and the Dow/Gold ratio (1929, 1966 and 1999). A great portion of the 1930s and 1970s rallies occurred when the Dow was falling significantly. In fact, the biggest rise in the gold price occurred when the Dow was falling or was trading closer to the bottom of its trading range during that period.

The current gold rally (since 2001) has mostly been during the time when the Dow has also been rising, with the exception of a short period in both 2002 and the end of 2008 to Feb 2009. The best of the current gold rally, since 2001, has been during a time when the Dow was rising as well.

With the Dow still relatively close to all-time highs; I believe the current gold rally has not yet had its best period - it is still to come, and will be during the time that the Dow is falling just like in the 1930s and 1970s. It is my believe that if gold goes on to rally from here, then we will have financial turmoil like there has never been. The word depression might not be adequate to describe what is coming. The Great Tribulation might be the proper term. More details on this in my next updates.


Gold/Silver Ratio Suggests Silver Will Outperform Gold

In my last update, I covered the Gold/Silver ratio, and explained why I think the Gold/Silver ratio will soon fall straight down. Below is a Gold/Silver ratio chart (from stockcharts.com), which shows some more evidence to suggest that it could indeed fall soon:

$GOLD:$SILVER (Gold - Spot Price (EOD)/Silver - Spot Price (EOD)) CME/CME

On the chart I have indicated a trading channel in which the ratio has been moving for the last four months. On Thursday, 28 June, it hit the top of that channel and was smacked down immediately. When price goes out of this channel, it could be a sign of where this ratio, as well as the gold and silver price is going.

More importantly, there is a bearish divergence, between the ratio and the RSI. The RSI has been making lower highs, whereas the ratio has been making higher highs. This could be a signal that the ratio will soon fall significantly, confirming higher prices for gold and silver.

Below is a chart for gold (from fxstreet.com):

XAU/USD Spot Chart

On the chart, I have indicated a big triangle. When the price moves out of this triangle, it is very likely to fall or rise very fast (a very long way). It really could go either way, and nobody can be 100% certain which way it will go.

However, before price makes a big move, there is almost certainly going to be signs and evidence of that big move. Based on the evidence that I have collected, analysing gold and silver, I am convinced that the big move will be higher.

For more silver and gold analysis and guidance, see my Long-term Silver Fractal Report & Long-term Gold Fractal Report or subscribe to my Premium Service.

Warm regards,

"And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved"

 

Back to homepage

Leave a comment

Leave a comment