Gold News

Gold/Silver Ratio: Slowly 'Toining

What would the 3 Stooges say...?
The TURN UPWARD in the Gold/Silver Ratio has brought a degree of market upset, writes Gary Tanashian in his Notes from the Rabbit Hole.
The question now is whether that is all.
Was the GSR simply forecasting Evergrande and associated systemic hype or something worse?
And by "worse" I don't mean the Fed pretending that it really wants to start tapering and go hawkish. As belabored often, the Fed was forced into a hawk suit last spring as the public ate the inflation hysteria.
Let's ask Larry...
Sorry, I mean Larry...
By "worse" I mean a real market liquidity event. Not necessarily a game ender (I think the inflation will resume) but a serious shot of fear put into heretofore stout inflation traders.
The Gold/Silver ratio (and its fellow liquidity rider, USD) have halted this week after foretelling the break that happened across risk 'on' and reflation-sensitive markets on Monday.
GSR is on a normal looking pullback within its young and intact intermediate uptrend.
If the GSR toins for real (Moe's Brooklyn accent, folks) we'll have more pain, at least in the inflation/reflation stuff.
Of course, we have a group of economic eggheads sitting around a table this wek who will tell us they are managing normal policy as usual.
But the Fed are managing our expectations. Did the little market upset that culminated on Monday do the trick? Are our expectations sufficiently managed by the markets to their liking?
But taking the GSR at face value the market is still vulnerable. Anti-USD and Inflation sensitive parts especially. Let's see if that vulnerability flips the eggheads before November's "taper" begins.

Gary Tanashian successfully owned and operated a progressive medical component manufacturing company for 21 years, through various economic cycles. This experience gave Gary an understanding of and appreciation for global macroeconomics as it relates to individual markets and sectors. Along the way, Gary developed an almost geek-like interest in technical analysis (TA), to add to a long-time interest in human psychology. Various unique macro market ratio indicators were also added to the mix, with the result being a financial market newsletter, Notes From the Rabbit Hole (NFTRH) that combines these attributes.

See the full archive of Gary Tanashian.

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