Wednesday, April 20, 2016

Analysis: Will The Gold/Silver Ratio 
Narrow Further?
Frank Holmes* tidbits of news & developments in the resources/precious metals sector .. 
* The best performing precious metal for the week was silver, up 5.66%. Silver has overtaken gold as the year’s best performing precious metal, reports Bloomberg, extending its gains to 17% on the back of a stabilizing Chinese economy. The precious metal, which is used in a variety of industrial products, is now trading at a 5-month high.
* Following a strike that lasted nearly six weeks, a majority of gold sellers in India have finally reopened their doors. This is positive news for the global gold sector, which has been missing its largest buyer of the precious metal. Good news was reported in China as well, where gold demand picked up to 183.2 tonnes in March, according to Lawrie Williams. Gold demand surged in Japan too, with sales climbing 35% in the 3 months ended March 31 with the imposition of negative interest rates.
* Deutsche Bank, one of 4 banks accused of manipulating silver futures prices, reached a settlement this week, reports Bloomberg. Lawyers for traders said the bank signed a binding agreement and arranged to expose other banks’ rigging as well. Interestingly enough, Reuters reported Thursday that DB also reached a settlement in U.S. litigation alleging that it conspired to fix gold prices too, according to an article on ZeroHedge.
* HSBC believes the gold/silver ratio (which measures how many ounces of silver it takes to by an ounce of gold) will narrow further, meaning that silver is outperforming. In a research note on Tuesday, the group stated that the ratio is back below 1:78, explaining that retail demand for coins and small bars, along with light institutional buying in the paper markets, has boosted silver. TD Securities sees gold strengthening as well, particularly on the back of a strong dollar, a dovish Federal Open Market Committee (FOMC), and equity market volatility.
* James Rickards, chief global strategist at West Shore Funds, told Bloomberg that he thinks gold will soar 700% in the near future. His reasoning? Cyber threats. Rickards explained that the 21st century cyber age poses risks to digital money and wealth to all investors and savers. “The thing about gold is you can’t hack it, you can’t erase it, you can’t delete it,” he explains.
LINK HERE to the article

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