Will Silver Outperform Gold In The Coming Months?
Michele Schneider | Sep 29, 2022 12:38AM ET
As we move into October soon, I wanted to take a moment to highlight some of my recent daily columns from September.
I wrote a Daily titled Why Higher Inflation Matters and Transportation is Key where I highlighted that the iShares transportation sector and the high-yield bond market would telegraph where the stock market was headed.
Then I wrote The Market Stabilizes While Transports Hold Their Breath which reiterated again the need to keep an eye on transportation as a gauge of the health of our economy.
Then FedEx (NYSE:FDX) made a shocking earnings announcement about a massive quarterly loss and the withdrawal of financial guidance for the rest of the year.
IYT led the entire market lower.
Then I wrote a column titled, Biotech Sector Should Come Back First and I explained that biotech should be on your shopping list.
Then Biogen (NASDAQ:BIIB) skyrocketed by 39% yesterday, due to their Alzheimer's drug being successful in a late-stage trial.
That and the QE announcement by the BoE sparked a major rally.
Yet, what about commodities?
I also wrote a column entitled Is Silver About to Outshine Gold? I explained that when analyzing the trend or a trade-in gold GLD, it's a good idea to look at Silver (SLV) because trends in these metals tend to be reliable when they are in sync.
h2 The Gold/Silver ratio/h2The Gold/Silver ratio measures the amount of silver it takes to buy one ounce of gold. Looking at the ratio since 1980, one can quickly identify the highs and lows.
Since the ratio has been published, only three times has it been above 95:1. The first time was in the early nineties.
It was at 95:1 intraday today and closed today at 89:1. Today, silver is cheaper than gold. The gold to silver ratio is at historic lows.
Hence, I leave you with one more dose of free wisdom to consider silver and why it might outperform gold in the coming months.
h2 ETF Summary/h2S&P 500 (SPY) Right into resistance however, with an impressive reversal bottom
Russell 2000 (IWM) Cleared some resistance but still needs to prove it can hold now about 167
Dow (DIA) Right into resistance and still the weakest of the indices-300-301 needs to clear
Nasdaq (QQQ) 280 has to clear and 273 now major support
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KRE (Regional Banks) Inside day right at the pivotal 60 level
SMH (Semiconductors) Holding key support but needs to clear 198-200
IYT (Transportation) Mean reversion-impressive hold of the monthly MA and 210 now major resistance
IBB (Biotechnology) Biogen helped this-if the bottom is in needs to hold 117
XRT (Retail) A nice looking bottom provided it clears 62 and holds 57
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