the tarot indicator

This Gold Silver Ratio Is An Essential Signal Of Rising Silver Prices

The previous time the gold silver ratio stood below 40:1 was in February 1998, just right after silver had staged a 33% rally in five weeks, whilst gold had gained just 4% over the exact same period (which commenced at the start of the year). The contraction within the ratio over the period was from 48.4:1 to 38.1:1.

This time, some thirteen years on, the gold Silver Prices ratio is buying and selling at between 39:1 and 40:1 and a similar contraction has taken exactly the exact same length of time. This time however, gold and silver are trading at over $1,440 and $36, whilst back in 1998 they had been at $300 and just over $7.

Now the Silver Prices have jumped up as a result of a continual belief (whether or not right or wrong) in gold's upward trend on the back of prevailing geopolitical and inflationary worries. Both gold and silver are already in sustained bull markets, whilst in 1998 the transformation in ratio marked the start of a shift in sentiment, albeit one that was buffeted by subsequent external events.

Silver investment can frequently exceed that of gold for more than just one single reason: a) the history of silver's higher volatility over gold, prompting expert activity with a view to gearing up on returns; b) silver's lower unit price, which attracts some smaller-scale traders who want exposure to precious metals due to inflationary worries in particular and who do not necessarily have sufficient wealth to invest in gold to any meaningful level; c) within the United States in particular, silver has a long-standing investment tradition. This is due to the period when the US dollar was on the gold standard and private people had been prevented from keeping gold, so they utilized silver as a substitute.

At the start of 1998, gold was beginning to stage a recovery following a lengthy period of uncertainty, characterized by intermittent announcements of large-scale central bank sales that unsettled market sentiment; this was augmented by increasingly heavy mine hedging as well as these two fundamental elements, combined with anti-inflationary fiscal policy, had kept gold prices under some pressure.

What was unique about the start of 1998 was the starting formation of the European Monetary Union, which gave the marketplaces a degree of comfort and reduced the expectation of recognized sector sales. (This, obviously, was latterly to be stymied by the headline in May 1999 by HM Treasury in the UK of the proposed disposal of up to 40% of UK gold holdings; sentiment then changed considerably as a result of the institution of the first Central Bank Gold Agreement in September 1999). Investors started to return to gold and silver was a normal beneficiary of the changes in sentiment.

Curiously enough, silver fabrication demand in 1988 was just over 26,000 tonnes; in 2010 it was very close to the exact same level, suggesting that the market itself isn't a lot deeper than it was within the late 1980s. Actually, on the basis of LBMA clearing figures, the December 2010 daily average clearing pace was just below 100 million ounces, much less than one-third of the clearing numbers for end-1997.

The framework of the demand side has changed with industrial demand from customers fluctuating, but photography, jewelry, and silverware falling considerably. Coin demand from customers, by contrast, continues to be growing steadily.

Continual retail demand has made it easier for the rise in the price of silver in recent months, reflecting the continued awareness at the retail level of the affordability of silver by comparison with gold. This has been especially marked within the Far East, where silver bullion bars have scarce as well as commanding high premiums, whilst India and the Middle East have also been powerful buyers.

As a result the ratio has to some degree taken on a life of its own and been bought and sold as an outright entity within the bullion markets. Today at 13-year lows it is not in unknown territory, but is definitely oversold.

While the markets remain bullish about the prospect for gold on the back of continual inflationary as well as geopolitical fears, silver is most likely to continue to draw in attention. The outright price might make silver unattractive for fresh bull positions, but theoretically driven and momentum trades might yet see costs higher if the political scenario isn't resolved with a minimum of further trauma. Silver has frequently been the commander between the two precious metals due to its lower unit price and higher volatility; the ratio can therefore be regarded as a similar leading indicator. Actually it is probably one of the most significant indicators in terms of precious metals market sentiment and, so, when it comes to searching for guidance, the chart ought to be watched carefully for signs of change. Even stabilization could be significant; a bounce may well bring about stops. I recommend you buy silver dollar coins and put them away safely for the time coming soon when you may need them.

Tarot Lessons - Court cards and Meyers-Briggs/Keirsey

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