Silver Soaring, Gold/Silver Ratio Now Down to 81

Silver Soaring, Gold/Silver Ratio Now Down to 81 from GoldSilver.com

TDC Note – The GSR hit the mark that we wrote about last week – Silver Beginning To Shine All On Its Own Power. We suspect the GSR will continue to drop and the next target we have set is below 70. It may get as low as 65:1 but we really would like to see it south of 50:1. Not sure that it will get that low in the near term but in the mid term we see this as a real possibility.

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Silver decisively pierced through $19 this morning.

Gold is up, too, by 1.2%, but silver has risen 3.4% as we write.

With silver’s outperformance, the gold/silver ratio has now fallen to 81.

Since the gold/silver ratio peaked at 93 in June, the silver price has jumped 30%.

We’ve shown many times that once the ratio begins to reverse it has quite a ways to fall. It hit 31 in 2011, and 17 in 1980. As many of our readers know, Mike Maloney is convinced we’ll see a repeat of the 1980 low. That implies MUCH higher silver prices.

What seems clear is that despite what a number of pundits have claimed, this rally has not been the sole result of short-covering by traders. Yes, there was a lot of buying activity as investors covered their short positions. But now that we’ve started a new month, if that was the primary market driver then we should be seeing a lot of selling and a retracement on the silver price. But that’s not happening.

This rally in silver is actually being fed by the fundamentals that have been in place for a long time. And this recent rise, could just be the beginning of something bigger.

Yes, there will be pullbacks along the way. But the outlook for silver is looking brighter today than has in recent memory.

Make sure you have the amount of silver you want for what lies ahead.

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Michael Maloney is the founder and owner of GoldSilver.com, a global leader in gold and silver sales and one of the world's most highly regarded investment education companies since 2005. He is author of the best selling precious metals investment book of all time, Guide to Investing in Gold and Silver, published in 2008. Mike Maloney was born in Willamette, Oregon, and spent most of his youth in the Los Angeles area. He is a life-long inventor and entrepreneur. At age 17 he traveled all over the U.S. selling mini-bikes and go-karts. By age 23, Mike founded the sales firm of Michael Maloney & Associates, growing it to five employees and two branch offices. He became a designer and manufacturer of high-end stereo equipment that won several engineering and industry awards. In 1992 his designs were selected as one of five permanent exhibits for display at the opening of the 20th century design wing of the royal Victoria & Albert museum in London, the world's greatest design museum. "That's about the time I had my first up close and personal encounter with economic cycles," Mike says.