Guest Post by Steve Saville
 Horning in a little on Steve’s post, the chart below was included in an NFTRH update on March 14, with this observation:
“While the GSR [gold-silver ratio] and HUI have indeed spent most of their time in negative correlation, the launch phase of the bull market (2000-2003) was different.”
Also, recall this public post yesterday: Silver-Gold Ratio, Bottom Retest Completing? Bottom line, Steve Saville’s views are in line with my own regarding the gold/silver relationship.
Gold vs Silver
We most recently discussed the long-term performance of the gold/silver ratio only two months ago, but the subject is sufficiently important to warrant some repetition. So, without further ado and with reference to the following monthly chart, here are the main points we made in our 4th February commentary:
Putting in a real bottom (one that a major bull move can generate from) is not easy. A subscriber just passed along a view of the Hulbert HGNSI showing that plucky gold newsletter writers got way over bullish right around the Ukraine hype period. They and their cheer leading are their own worst enemy.
But here is a view of something that has been going on since August that I think could be very relevant. Silver has been declining vs. gold in search of a retest of last summer’s lows for the Silver Gold ratio (SGR). This has gone hand in hand with the big, grinding bottoming process in the precious metals stocks sector.
Just continuing to do what I feel needs to be done in a market like this. The Semi’s would lead a bull charge, while Tech, Biotech and Small Caps would lead the bear. Throw in some indicators like BKX-SPX and especially the Equity Put/Call ratio (making a hidden bear signal that I for one found pretty compelling) and we lean bearish.
As for the precious metals? Well, when we were noting a bearish CoT structure and Ukraine hype, the ‘community’ was noting breakouts and bullish objectives. Nagging details like the CoT? Cue the crickets…
That’s all under the bridge now. It’s what’s directly ahead that is important. NFTRH 284 looks ahead to coming signals, and it’s out now.
They took their foot off the throats of the stodgy old monetary relic and his impetuous running mate as of Tuesday. Here’s the most recent gold and silver commitments of traders reports. There’s probably still more unwinding to do…
Gold continues to look like it wants to test support at around 1270. A rise above 1300 could put that prospect in the rear view mirror, however.
Did you see Alex Lifeson at Rush’s induction into the Rock & Roll Hall of Fame? In accepting the award he offered the profound words “blah blah blah, blah blah, blah blah blah blah blah…”
Well NFTRH 283 blah blah blah, blah blah… and furthermore blah blah blah blah… and it is out now!
It remains all one market vs. the US dollar, AKA the anti-market. SPY has actually remained somewhat on its own course over the last week, but the others are strictly in anti-USD mode right on down to the little hook upward this morning as Uncle Buck hooks down. Silver, which I got longer on yesterday, is the most sensitive.
Well, gold bugs should not necessarily be afraid. As noted in an NFTRH Update last week the seemingly frustrating lack of silver leadership is not really something to worry about. An HUI-GSR positive correlation has happened before; like from 2000 to 2003 at the birth of the secular bull market.