Dow Gold and Gold Silver Ratio Charts Remain Bullish

Silver is more attractive than gold from a returns point of view.

Today’s AM fix was USD 1,684.50, EUR 1,285.09 and GBP 1,039.69 per ounce.
Yesterday’s AM fix was USD 1,681.50, EUR 1,270.11 and GBP 1,031.22 per ounce.

Silver is trading at $30.92/oz, €23.70/oz and £19.20/oz. Platinum is trading at $1,571.00/oz, palladium at $701.00/oz and rhodium at $1,150/oz.

Cross Currency Table – (Bloomberg)

Gold climbed $11.60 or 0.69% in New York yesterday and closed at $1,684.70/oz. Silver surged to a high of $31.48 and finished with a gain of 1.98%.

Gold edged up today and hit its highest range in two weeks in the prior trading session on the heels of the deal forged that avoided the U.S. fiscal cliff disaster.

The far more substantial risk from the pending budget negotiations remains as does the appalling US national debt and unfunded liability situation – both of which offer long term support to gold and silver.

The market lustily greeted the deal that U.S. Congress passed to raise taxes on the wealthy and spare the middle and lower income earners.

However, the very necessary cutting of budgets in various sectors, military and domestic, will no doubt fuel many more political battles as the nation’s finances continue to deteriorate.

In India, the central bank has required restrictions be placed on gold imports by banks and agencies, while the finance minister said he was evaluating further tax increases on gold imports to help rein in a current account gap that touched an all-time high in the Q3 2012.

U.S. weekly jobless claims for 12/20 are released at 1330 and expected at 365,000 and at 1900 GMT the FOMC Minutes from the fed’s December 12th meeting are released.

Dow/XAU Index – (Bloomberg)

We continue to favour the Dow Gold Ratio chart as a good indicator as to when the gold bull market might end. It is likely to reach the levels seen in 1980, close to  1:1 or the Dow at 5,000 or 10,000 and gold at between $5,000/oz and $10,000/oz.

This will be an indication that the gold bull market will be in its final innings. Provided of course we do not return to some form of gold standard whereby gold bull markets and bear markets will again become confined to history.

Gold Silver Ratio Index– (Bloomberg)

We continue to be more bullish on silver in the long term and believe the gold silver ratio should fall back to the geological 15:1 level as was last seen in 1980. This means that silver continues to be more attractive from a return point of view.

3 comments on “Dow Gold and Gold Silver Ratio Charts Remain Bullish
  1. Nathan el Corochio says:

    you know im a noob when i go to the silver miners site and think their share price is the silver price. I thought it went down to $20!

  2. Max Power says:

    A new gold bullion Fiji coin bearing an image of the Queen is now available, following the removal of the royal head from new bank notes.

    The Fiji Times reports that New Zealand Mint has produced the new coin, the last Fiji coin to carry the effigy of Queen Elizabeth II.

    The Mint’s chief executive is quoted as saying for that reason although the coin is primarily for investment it also has collector intrigue value.

    The one ounce coin is valued at just over 1,200 US dollars and was produced by NZ Mint under licence from Fiji’s interim government.

    New currency notes launched by Fiji’s Reserve Bank in December bear images of Fiji flora and fauna but not the Queen.

    The old notes will be phased out by the end of the year.

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  3. Steven Akin says:

    Ugh I’m getting killed here.