Market Report: Silver Breaks Out

by Alasdair MacLeod
Gold Money

Gold and silver prices rose this week, with silver noticeably outpacing gold. Gold rose $40 from last Friday’s close to trade at $1879 in morning European trade today, while silver jumped $1.78 to $25.77 on the same timescale. Volumes and Open Interest on Comex picked up in both metals.

Our next chart is of the gold silver ratio, which has fallen significantly this week, reflecting silver’s outperformance.

After a period of consolidation from late September, the ratio is on its way down again, and having hit a peak of 124 last March — before the Fed cut its funds rate to zero — now stands at 72. The reason for this outperformance is unusual. Gold has underperformed key commodities, such as base metals and some key soft commodities, while silver has performed with them. At a time when other inflation hedges, such as cryptos and equities have outperformed gold, commentators now see gold as a bit of a backwater.

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