Something strange has been happening in precious metals lately. Gold has been doing a lot better than silver, even as the paper market internals have increasingly predicted the opposite. The result is a gold/silver ratio that’s near the top of its historic range:
In the paper markets (where futures contracts are traded) the imbalance is even more glaring, with gold speculators extremely bullish (which normally leads to a price decline) and silver speculators hyper-bearish (which normally leads to a big rise).
Based on the gold/silver ratio one would expect silver to do better than gold even if both are rising. And based on the COT report, gold should fall while silver rises. Today the metals finally started to behave this way, with silver rising and gold falling.
One day, of course, does not a trend make. It’s just interesting to see precious metals behaving logically for a change.