Thursday, September 22, 2011

Silver:Gold Ratio Drops As Paper Comex Silver Is Crushed Downwards

Well, here is a new update on the silver to gold ratio.  Previously I mentioned that Gary from was looking for the gold to silver ratio to rise further while I have been looking for the opposite.

Well today, Gary got it right and in a big way.  The GSR (gold to silver ratio) shot much higher today as silver was hammered 10% lower in one trading session.  Let's not forget that The DJIA was down around 400 points and gold sold off as well, only as usual, silver sold off the most.

I don't think this is a coincidence either.  Silver is a much smaller and therefore more easily manipulated market than gold.  Whenever the opportunity is right, such as this new deflationary impulse we are experiencing, silver is always hit the hardest and always declines fastest and furthest.

I suppose this will continue to happen until the day comes when the silver price is set in the cash market and not on the Crimex (comex).  Until such time, you can expect the Federal Reserve's right hand bank, JP Morgan, to sell as much paper silver as required to keep a lid on prices and keep silver in the dark.

Hats off to Gary at Biiwii for his call on the GSR.  I have posted a couple of charts below of the weekly Silver:Gold ratio (SGR).

The first chart shows how the SGR broke the uptrend line today.  The second chart shows a continuation of what looks like a bullish falling wedge which I expect to resolve to the upside once this deflationary scare has played out and the Federal Reserve starts printing money and bailing out more failing financial institutions.

Got Silver? Got Gold?