Thursday, September 3, 2009

Silver v. Currencies

Figure 1 is a weekly chart of a continuous silver contract. The indicator in the lower panel measures silver's 52 week performance relative to a basket of 8 currencies.Those currencies are: 1) Australian Dollar; 2) Canadian Dollar; 3) Swiss Franc; 4) Eurodollar; 5) British Pound; 6) Singaporean Dollar; 7) Japanese Yen; 8) US Dollar. Relative to these currencies, silver is outperforming. Over the past decade, such outperformance led to significant gains in the price of the metal.

Figure 1. Silver v. Currencies/ weekly


mike said...

hi guy thanks for the natural gas analysis. muchly appreciated. rgds, mike

Guy M. Lerner said...


you are welcome...I don't know if there is any correlation but since I wrote that yesterday morning, I think NG is down about 10%...I am not sure what it means

mike said...

yes NG went down further last night. Would really appreciate further updates on gas, especially if it keeps going down at this pace, surely there will be a bottom to this. its trading below cost of production formost producers, so eventually it has to come back up. Question is how long. as per your previous posts, its all about time and ones investment horizon. I am into gas long term. i rather be buying gas than equities - after all gas cannot go to zero.

Anonymous said...

Guy whats your take on the dollars refusal to break 98 and unwillingness to rally? I thought we would have gotten a much stronger bounce after the Pretcher Faber call from about a month ago.

Guy M. Lerner said...


I think you meant the Dollar Index at 78 --not 98.

I assume you are referring to the fact that the Dollar hasn't had a stronger bounce in the face of overbought, oversubscribed equities--i.e, the flight to safety trade.

My guess is 2 things: 1) equities really haven't broken down YET as they remain in this range with an upward bias --that's my interpretation on equities; 2) at some point, the Dollar doesn't become a safe haven --maybe this time around it is gold; maybe Dollar has lost safe haven status due to money printing

A rudimentary guess at best!!!

DavidDT said...

for now silver is due for correction, started 1/4 intended short pos today via futures close to 17

P.S. Nat gas long UNG Oct10 at +50% profit as of now (took 1/2 off today)

P.P.S. Prechter/Faber calls will rid you from your money by the time they will be correct - I agree with Guy - sizable correction is not due till at least mid Oct