Mail Call

Often times while reading an email, I will get a line that stands out to me, as something quite important or telling about a certain fundamental or technical point. The line that caught me was this one:

"When compared to gold how has silver performed since the last peak and how does gold's previous high relate to silver's previous high? "

Well, not that it is some ultimate metric, but merely an abridged look at the nature of the relationship between the two precious metals, and what may be to come in this bull market for silver.

While gold has has gained around 190% since it's previous high 30+ years ago, silver is still 28% below it's all time high price during the same time period. In that rally we saw silver outperform gold and I expect the overall downtrend in the gold to silver ratio to resume in this current bull market for the next 12-18 months.

If silver was 190% above the previous high it would currently be trading at over $95.00 per ounce. We should see $95.00/oz silver before the end of 2013, unless drastic changes are quickly made to monetary and fiscal policy worldwide.