GLD, monthly, 2yr
SLV, monthly, 2yr
Summary
Gold is back to the highs of February, although Silver is lagging a little behind. Again, this would arguably because Gold is seen as a better monetary store against depreciating currencies than the more industrial Silver.
*Silver - as usual, rose around twice as much as Gold, so at least the 1.5-2.0x historical ratio of loss/increase remains intact.
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October will be a critical month for both the equity and commodity market. The most interesting aspect of everything right now is that the great uncertainty of 'when will the Bernanke start QE3' is done. That sure does make things a lot simpler.
With QE3 surely priced in, what direction (other than down), could both stocks and commodities go this Autumn? Considering the recent econ-data - most notably GDP and Chicago PMI, both are indicative of a US recession having probably now started.
The Bernanke clearly is going to fight the 'big bad' deflation all the way, yet those deflationary pressures sure are powerful.
Metal break/snap targets for the deflationists
GLD <160
SLV <30
If we can attain those closes at the end of October, then a very viable secondary deflationary wave could indeed be underway - one that would likely last well into summer 2013.
Good wishes
