Silver Price Forecast: Silver Set To Start 70s Style Rally?
In terms of gold, china is now improved value than during a commencement of a longhorn marketplace in 2001. In Nov of 2001, when china cost bottomed, a Gold/Silver ratio was about 66 compared to 78 today. In other words, bullion has indeed outperformed china given a commencement of this changed metals longhorn market.
It is indeed a chronological normal for bullion to outperform china cost for many partial of a longhorn market, solely for a really final part. For example, this happened in a 70s, when bullion was adult on china from a commencement of a longhorn marketplace (let’s contend about 1971) until roughly a really finish (about Oct 1979). So, during an roughly ten-year longhorn market, china usually overtook bullion about 3 months before a end.
The structure of a stream china longhorn marketplace has a lot in common with a 70s one. However, there are also some differences, that indeed foster a stronger china cost opening during this longhorn market. One critical disproportion that favours china this time around, that we dealt with in a prior article, is a fact that a stream china longhorn marketplace started during a most opposite and some-more enlightened time for china as compared to a 70s longhorn market.
This longhorn marketplace indeed started after or closer to a Gold/Silver ratio reaching an all-time high turn (in terms of time and a ratio value) as ostensible to before or closer to a Gold/Silver ratio reaching a poignant low (in terms of time and a ratio value), like in a 70s. Which means that china was really undervalued as compared to bullion (and still is), during a start of a stream longhorn market, so it has some-more room to go aloft contra bullion and fiat currency. The Gold/Silver ratio was around 30 during a start of a 70s longhorn market, that is most reduce than a 66 of Nov 2001.
Below, is a “fractal analysis” comparison of a stream and 70s longhorn marketplace for china (all charts are from):
The tip draft is china from 1966 to a finish of 1979, and a bottom is china from 1999 to Aug 2015. we have highlighted pivotal events on both charts to uncover how a structure of a dual longhorn markets could be similar. The stream structure is bigger in terms of time.
The Dow/Gold ratio appearance in Jan of 1966, before a start of a changed longhorn market. In a identical demeanour a Dow/Gold ratio appearance in Aug 1999, before a start of a stream longhorn market.
Some time before a initial critical arise of a china cost in Feb 1974, a Dow again done a poignant arise (in Jan 1973). This is really identical to a Oct 2007 arise of a Dow, that came before a Apr 2011 arise in silver.
Again, after a Dow arise of Feb 1974, there was another poignant Dow arise in Dec 1976, some time before a arise of a china longhorn marketplace in Jan 1980. In May of this year, a Dow done a peak, that could be a ultimate arise for a prolonged using longhorn market. If this is indeed a peak, afterwards it is identical to a Dow arise of Dec 1976, that came some time before a arise of a china longhorn market.
So, if this fractal research is accurate, afterwards we will see significantly aloft china prices over a subsequent several years.
Another critical disproportion of this longhorn marketplace compared to a 70s longhorn market, is a fact that a stream Dow arise before a ultimate china tip is indeed most aloft than all prior Dow peaks during a china longhorn market. During a 70s, that identical Dow arise (December 1976) was indeed reduce than a Jan 1973 peak. we consider this will infer to be significant, given a crashing Dow will act as fuel for a arise in china prices.
Courtesy: Hubert Moolman