“Sometimes you're in great demand. Then suddenly your career hits the breaks.” - Gary Sinise
As the Summer Surprise of higher highs, persistent reflation, and the end to the end of the world trade continues, I have been receiving questions about commodities, specifically as it relates to silver (SLV) and gold (GLD). Often referred to as “poor man's gold” given that it generally trades at a discount to the yellow metal, silver relative to gold appears to have washed out. I have been noting that I believe the next wave higher for risk assets could easily be led by emerging market stocks and commodities, but within that trade, silver looks to be more sensitive to a return of growth expectations. Why? Because relative to gold, silver is used more in industrial production comparatively speaking.
With that said, take a look below at the price ratio of the iShares Silver Trust ETF (SLV) relative to the SPDR Gold Trust ETF (GLD). As a reminder, a rising price ratio means the numerator/SLV is outperforming (up more/down less) the denominator/GLD.
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