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Gold/Silver Ratio Flashes Classic Signal?

Mike Maroney
December 10, 2018
Video Transcript

Mike Maroney: Good afternoon! My name is Mike Maroney and I'm coming to you today from the Monex Precious Metals Studio. We're going to do our Silver Centric video, but before we get into the silver aspect of the video, we're going to talk a little bit about gold.

Obviously, today, if you've been watching the market, you saw the S&P retest the recent low close at $2,630.00 and then we bounced all the way back up to $2,670.00, but a lot of the action will be predicated on what happens tomorrow, on Friday morning, when the jobs number is released. The expected number is right around 195,000. ADP came out with an estimate today of 175,000, but the real kicker in many people's eyes will be the inflationary figures that are determined by the actual increase in the potential income of these new employees. If we start to see inflation growth in wages, that is a very key signal as far as the FED is concerned and that may be enough to push them over the edge as far as to continue on the path of raising rates.

Now, in the meantime, what we have been dealing with around the world in the financial markets is a massive amount of uncertainty. We had the stock market trading as low as, excuse me... as high as $2,800 three days ago. Today, we were looking like we were going to break below $2,600-- a 200-point drop. We had the President of the United States meeting in Argentina on Friday talking about how everything was great with China. Then yesterday, we arrested one of their CEO's in Canada and suddenly everything that was great was no longer great again and the trade war potentially was going to escalate. We're dealing with a situation where we are seeing massive uncertainty throughout the world. I'll give you another example, if the Italians decide to exit out from the agreement that has created the Euro and go back to the Lira, what will happen to the bonds that they've issued and are being held by all of the European Banks? Literally, it could crush the banking system as we know it. We have more uncertainty today than any other time in history and gold right now is $700 below its high from 2011, when people thought we had uncertain times. So, it's not unusual for people to think that gold could go much higher, but yes this is a Silver Centric video.

What I want to talk about now is the fact that the gold/silver ratio is at 87 to 1, the highest level in the last 30 years. We've typically seen an average of about 50 to 1 and we've seen a low of about 15 to 1. If people buy gold in uncertain times, they really start to buy silver when things get really uncertain, and that's why right now, you need to give us a call here at Monex. So, we can show you how and explain how you can potentially take advantage of precious metals and they could be poised for a massive move to the upside. Quite frankly, they could add a level of protection for your portfolio, but we have to find out if it's right for you. You have to find out if it's right for you and the only way you're going to do that is give us a call here today at Monex. So, we can talk about the intricacies of investing in precious metals and find out if it's something that fits into your portfolio. Thank you!

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