The Gold/Silver ratio closely tracks industrial production and should rise as growth slows, says analysts at CIBC.
Key Quotes:
“The gold/silver ratio, despite dipping recently, has edged higher this year. A decline in the price of silver of almost twice the magnitude seen in the price of gold is the main factor behind that move. And a further decline in the price of silver could be on the horizon.”
“As global growth slows into 2020, demand for silver, which has tracked industrial production more closely since the recession, is likely to fall. At the same time, the price of gold should get a lift from a weaker USD. With the market underpricing the odds of Fed easing in 2020 as growth slows, the gold/silver ratio is poised to head higher.”.
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