Thursday, July 6, 2017

Recent beatdowns in gold and silver prices now have gold to silver ratio just under 77:1

Starting with the computer algorithm 'fat finger' which took down both gold and silver nearly 2% in less than a minute a little more than a week ago, to the continuing beatdown in prices since the Fed raised interest rates, the short-term outlook for the precious metals have not been strong despite the fact they should be going in the opposite direction of the falling dollar.

However one of the two metals has been declining at a much greater rate than the other, and this has led the gold to silver ratio to climb to nearly 77:1.  And as the famous value investor Warren Buffett would say, " the essence of value investing is buying assets at less than their intrinsic value."

In silver, the total open interest SURPRISINGLY ROSE BY 2485 contract(s) UP to 203,541 DESPITE THE DRUBBING IN PRICE THAT SILVER  TOOK WITH FRIDAY’S RAID (DOWN 47 CENT(S) ON TOP OF THE  CONSTANT TORMENT THESE PAST FEW WEEKS.  
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0175 BILLION TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 397 NOTICE(S) FOR 1,985,000  OZ OF SILVER  - Silver Doctors
These numbers on the Comex show that institutional investors recognize that the current beatdown has created immense value in silver, and as such they are betting on a return to higher prices.

Money is made in the markets not by simply following the momentum of something, but by finding the value of an asset when everyone else is rejecting it.  And with so much geo-political and economic uncertainty going on the world today, 5000 years of history has validated what is the most significant wealth protection and investment potential in any currency or market.

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