Silver – poor man’s gold
Year to date, silver price has increased by over 50%, and gold by more than 20%. The out-performance of silver relative to gold is a good indicator that gold bubble is entering a new stage, where retail investors poured in and started to grab the alternative to gold , i.e., silver, at a much cheaper price. In essence, silver has become ‘poor man’s gold’. Gold ETF (GLD) is traded around $130, while silver ETF (SLV) is traded around $25.
(click to enlarge)
The out-performance of silver started to kick in right around the Fed’s announcement in late August of their intention to ease monetary policy further. To show this, the following chart looks at the relative price between silver future contract and gold future contract, YTD.