The industrial metal will not be dragged up by gold
If gold was the metal that drove the conquistadors mad, in recent decades silver has had the power to induce near-psychotic states among its holders. I almost wrote “investors”, but that is too dispassionate a term for the true believers in silver.
In recent months, gold has become a respectable part of institutional core strategies, providing a useful anchor to windward in the post-coronavirus markets.
The price of silver, though, has been left behind by the now fashionable cohort of gold bugs. Silver is still up for the year in dollar terms at just above $18 per troy ounce. The gold/silver ratio reached its all-time peak on March 18, when the silver price collapsed to $11.94. At that point the spot price of a troy ounce of gold was worth 126.5 ounces of silver.
Since then the “GSR”, as silverados would put it, has drifted down to below 100, where it has been bouncing gently since the end of May. For the silver people, the relative strength in the price of gold is a buy signal. But they believe almost anything is a buy signal.
For the rest of this column: https://www.ft.com/content/c768ef03-6695-45b4-b282-f73843f41543