TradingShot

GOLD/SILVER ratio in the Subprime and COVID crises

TVC:GOLDSILVER   GOLD/SILVER RATIO
I don't know how many of you speculate on the Gold/ Silver ratio but I do. And I have come across an interesting pattern in 2008 during the Subprime Mortgage Crises that may be repeated now during the COVID crisis.

As you see on the chart, the LMACD is the key indicator on it, and it has topped at 0.069. At the same time the price action is very similar with 2008 as the March spike got sold aggressively and is declining towards the 1M MA20 and MA50. A break below may lead to a 2008-like -60% drop in total.

Do you think a potential upcoming global recession can repeat this pattern?


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Comments

premium content. once again, great insight.
+1 Reply
Nice one ! Its a really important ration everyone keep eyes on.
+1 Reply
I have been making youtube videos on this exact scenario for the last few weeks...Check out my Channel @Goldaddict....I am 100% in agreement with your Idea!
Reply
International sellers of goods and services have had trouble selling to the international market and have been locked out of their chief source for dollar funding to repay the loans they took out that are dollar denominated. When these loans come due (most likely rolled over in 3 month increments based on 3 Month LIBOR) there could be a major disruption in funding markets as they hit an air pocket. Lots of demand for dollars, not enough dollars in foreign countries to make debt payments and continue operations, leading to another blow-up a la March.
Reply
@MttRbk, Crashes "a la March" happen once in a while, it is unlikely to occur again in the nearest future. For the ratio to spike this way - precious metals have to go down heavily, which is not fundamentally foreseeable.
Reply
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