• 658 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 660 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,060 days Could Crypto Overtake Traditional Investment?
  • 1,065 days Americans Still Quitting Jobs At Record Pace
  • 1,067 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,070 days Is The Dollar Too Strong?
  • 1,070 days Big Tech Disappoints Investors on Earnings Calls
  • 1,071 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,072 days China Is Quietly Trying To Distance Itself From Russia
  • 1,073 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,077 days Crypto Investors Won Big In 2021
  • 1,077 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,078 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,080 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,081 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,084 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,085 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,085 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,087 days Are NFTs About To Take Over Gaming?
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Dominoes

dominoes

What started off as a tinder ignition in the currency markets this fall - namely, the US dollar asserting quiet dominance over each of the major currency crosses (first the yen, then pound, Aussie, the Swiss franc and recently the euro); has now caught flame in the more emotional risk proxies of the hard commodity markets - specifically, gold and silver.

And while silver typically runs the rabbit leg with gold on the risk continuum, the market began heavily selling gold over the past few sessions. This dynamic in turn has arrested the silver:gold ratio in the most recent swoon from undercutting the lows from late December.

To make a long story short, we believe the recent leg lower in the precious metals sector will likely continue - until the silver:gold ratio makes a proportional low. Considering gold has recently led the charge in undercutting its August low, this volatile feedback loop appears to have ample room remaining to inflict additional collateral damages in the short term.

SILVER (SLV) vs GOLD (GLD)
Larger Image

This perspective is also buttressed by the Value Trap comparative - which to date has recognized very similar momentum signatures in how the financials capitulated and led the broader market lower in 2008 and 2009.

Simply put, the miners have done the same with gold and silver here.

Value Traps: VKX:SPX 2008/2009 vs BDX:GLD 2012/2013
Larger Image

 

Back to homepage

Leave a comment

Leave a comment