Silver waiting in the wings, via Bloomberg

Silver waiting in the wings, via Bloomberg

I came across an interesting piece yesterday on Bloomberg's market live blog making an interesting point about silver and gold on a December 15 tariff delay.

I have been writing about gold and why I am not a gold bull yet. Of course, I really want to be a gold bull and the Fed's dovish shift had given me the fist part of what I need, a weak USD. Gold and silver were both boosted on the Fed's dovish stance. However, gold and silver both fell, as you would expect, on the news of tariffs being delayed and a trade deal coming.

The second part that I needed to really give me my conviction as a gold bull was a US-China trade deal that has a fresh boost of negativity/twitter attack. So, it was with interest that I read the Bloomberg's market's live blog that a tariff delay would ease trade tensions, improve global growth prospects and that would favour silver over gold. The piece made a case for the gold-to-silver ratio could decline below 80.See here for a piece I wrote on silver potentially outshining gold a week ago.The rationale is that silver is more reliant on industrial uses and, of course, gold was bid on the US-China trade dispute. Any move towards resolution would cause gold to fall.

So, the question running through my mind was, , 'With the Fed now dovish for the foreseeable future is it a question of either gold longs on tariffs imposed or silver longs on tariffs delayed?"

SIlver

I made a mental note to look at the silver chart after the tariffs were delayed. They fell pretty much as I would expect and very similarly to gold. So, if anything makes sense to me today on the gold and silver charts it would be short term sells.

Gold

It would be great to hear from any commodity traders as to what they were expecting for silver on a growing global growth scenario. I will be keeping an eye the silver chart and seeing what the market reaction is. For now, as i had been expecting, the two metals are moving approximately in tandem.

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