The Silver/Gold Ratio Can No Longer Be Ignored – Mike Swanson (05/19/2020)

Yesterday was a nice up day for the stock market and for silver too. On TV though all they talked about what the DOW action and ignored silver. It’s no shock, because very few people are interested in silver that watch CNBC or Fox Business and there is not a single silver stock listed among the top 100 most popular stocks to own on Robinhood. However, we cannot ignore what is happening with the silver/gold ratio.

In March when the markets crashed gold pulled back only a little bit, but silver fell just as much as the stock market did. This caused the silver/gold ratio to drop hard to make what is now clear was an epic low. Take a look at the chart of the ratio.

Notice how this ratio went straight up in 2011. That’s when silver made its final bubble run up towards $50.00 an ounce and peaked out during its last bull market cycle. Then silver fell for years while the stock market went up and did even worse than gold. Now the silver/gold ratio bottomed and silver stocks are performing better than the US stock market and even better than gold is right now.

I’m bullish on gold. I pointed out in yesterday’s video how the gold/spx ratio is trending up. If you want to beat the market then you want to be in the stocks and sectors beating the market and the gold/spx ratio tells you that gold is doing that now and so are mining stocks.

But silver has lagged gold in April. Now this is starting to change. But more importantly the silver/spx ratio is also in a position to breakout of a stage one base and join the gold/spx ratio into a new bull market. That means that we are looking at years ahead of us in which silver will outperform the S&P 500.

Since 2011 till 2018 silver lagged the S&P 500 as this ratio declined. Then it bottomed and now it is getting to turn up and begin a new stage two bull market. It closed last week above it’s 200-day moving average after having traded around it for over two and a half years.

This is where the money is at and is one reason why my top stock pick for this month has been going up the way it has been – even last week when the US stock market fell. This is why if you are not yet a Power Investor member in my private trading group you need to get in to take advantage of the big bull trends in gold and silver only just starting. To join just click here.

-Mike



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