Silver/Gold Ratio Indicates Lower Prices Are Ahead

APMEX

9/12/2018 10:46:55 AM

Daily Gold & Silver Market Report – 09/12/2018

Since June, the price of Silver has dropped significantly. Overall, Silver spot prices have gone from  $17.35 to $13.91 per ounce, a 19.8 percent decline in three months. According to Seeking Alpha, the chance for more price volatility in the market is rising. If Silver drops below a level last reached December 2015, there could be a massive selloff in futures. The forecast also points out that Silver has previously been known to fall below technical support levels, then quickly turn around just as it seems the Precious Metal is headed for more bearish times. Seeking Alpha Analyst Andrew Hecht wrote, “A 50% retracement of the move from mid-June would take the price of silver back to $15.655 per ounce which would be enough to cause some damage to the pocketbooks of the shorts currently licking their chops over the prospects of price carnage in the silver futures market.”

Silver and Gold have a longstanding relationship in the marketplace. Both are rare Precious Metals with industrial uses because of their unique composition and have both been used as currency for millennia. The Silver/Gold price ratio is an important factor for economists when forecasting where Precious Metals will go next. The ratio is calculated based on the number of Silver ounces needed to purchase a single ounce of Gold. While this calculation is straightforward, because of daily market shifts, the ratio must be carefully observed over periods of time to be useful in making market price predictions.

Gold Prices Dip Below $1,200 Before Recovering

The price of Gold briefly slipped lower Wednesday morning, dipping below that $1,200 per ounce mark before climbing back up. This decline comes as many investors wait for news about the trade turmoil between the United States and several of the world’s leading economies. COMEX Gold futures were also down early in the day. According to Investing.com, Gold prices were at their most recent low August 24, trading at $1,187.21 per ounce. Silver futures remained mostly flat, while the Copper experienced a slight lift.

Much of the world is squarely focused on the China-U.S. trade dispute, with concerns about escalation building almost daily. Next week, the Chinese government will appeal to the World Trade Organization for authorization to impose sanctions on the United States due to lack of compliance with a ruling over dumping responsibilities. This decision was announced following a statement Friday from President Donald Trump that more tariffs may be added against China, totaling $267 billion. As many investors continue to place their faith in the U.S. dollar, Gold has not yet returned to its traditional place as a safe haven investment in times of economic unrest.

Bitcoin Maintains Among Cryptocurrency Slump

A significant selloff of all major cryptocurrencies has begun, other than Bitcoin. These cryptos, referred to as “altcoins,” continued to be sold off in droves Wednesday, leading to three consecutive sessions of falling prices. This decline has been good for Bitcoin, however, pushing it to a nine-month high, according to MarketWatch. During early Wednesday trading, Bitcoin was up 0.37 percent while the largest altcoin, Ether, experienced a 14-month low. Ethereum Co-Founder Vitalik Buterin recently stated, “The blockchain space is getting to the point where there’s a ceiling in sight. If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”

At 11:45 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,204.90 Up $5.40
• Silver, $14.31 Up $0.11
• Platinum, $799.70 Up $7.40
• Palladium, $984.10 Up $3.30

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