In the morning when reading RSS feeds (I should think about placing its list somewhere on the blog) from several sources the information came to me that silver is highly underrated recent times. I try to carefully analyze such information, despite the fact that I use more of niche sources of information and what is in them is served rather carefully selected. Although I looked at this subject a little closer.
One of the factors that should be taken into account is the silver to gold ratio. It is said that historically it was 16, or 16 ounces of silver buys one ounce of gold. In view of the massive derivatives trading, selling certificates based on complex rules (that basically said “do not try to take this physical”), the silver market manipulation and the like rip accounting, the ratio is 3-4 times higher. After reading information about undervalued silver I looked at my favorite website provides charts stockcharts.com and yesterday I checked, this ratio it was 56 and today fallen slightly due to movements in silver. Six months ago this ratio was below 40. What I learn until now silver reacts slower than gold and gold is taking action now. When I check stockcharts before New Year I found out that price per kilogram of gold was about 38 000 euro. Right now it is 41 100 and seems still rise. Silver seemed to wondering all the moves, and this morning took off. At the same time when I check gold silver became the shockingly low price of 663 euros per kilo. The new year saw a jump to level 730 and it looks like that this morning go after gold and now cost 760.
We’ll see how strong it will move. From a technical point of view, per half year MACD is narrow, and the RSI is equal to 54 and is far from the area to buy. Moving averages of 50 and 200 are to each other in nearly parallel position and technically in the next few months should not be anything happening. The three-year term MACD lines have not yet crossed, RSI is less than 50 recent declines lasted too short to harm long distance running averages of 50 and 200 on a 3-year chart.
Precisely because there is little evidence for any event you may receive move. Of course, seriously people know that long-term perspective and fundamental considerations leave no doubt that the bull will have long reigned in the areas of commodity. While speculation is paper, and this can lead astray careless player.