"As a technician, I feel that there are few analysts that offer value for me, but you do. Your work on Gold ratios has helped my analysis greatly." --Jordan Roy-Byrne, CMT (The Daily Gold) 4.9.10

Wednesday, December 14, 2011

Gold-Silver Ratio correlated to USD

This chart is untouched since it was first produced for NFTRH156 on October 9.  It was meant to show the correlation between a rising GSR and a rising USD in 2008 and the non confirmation that maybe I should have paid more attention to in 2010 as I ghoulishly managed the beautiful GSR bottoming pattern prior to Bernanke's QE2 panic.

To this point in 2011, the two have been well correlated.  Most recently however, USD has made a new high while GSR has failed to do so.  Anyone viewing the GSR as irrelevant at this time is simply not paying attention.  GSR must rise to meet Uncle Buck for the bear case to really kick in.  Or put another way, if it does so, then the bulls are in deep doo doo as the USD's deflationary case will be confirmed - for the near term at least.

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