Friday, April 22, 2011

Gold Silver Ratio, US Dollar Index

The Gold Silver Ratio is dropping extremely quickly with a current value at 32.31.  In February 2010, the ratio was at at 72.81, a drop of just over 40 in 13.5 months.

The RSI is extremely oversold at 9.95.  I'm looking for Silver to level off or maybe pull back and consolidate which will bring the 'technicals' back to a 'normal' state. With the current market conditions, it is a possibility that Silver can reach $50 by next week.  While the US Stock market was closed on Friday, Silver traded and closed on Friday up another $1.22 to $47.78.

One of the catalysts for the Silver ascent is the US Dollar Index weakness over the past several weeks/months. As of April 22nd, it is trading at 74 which is below the December 2009 low of 74.23, not a good sign. IF the index should continue down, the next level of support should be the July 2008 low of 71.79 then the May 09 low of 71.22. 

With a continued drop in the US Dollar Index, inflation going forward is inevitable. Some people may want to stock up on daily consumables when they can find the items on sale. Some that want to hedge against inflation may want to look into storing food staples such as rice, pasta, beans and wheat in large Mylar bags. There are quite a few videos on this topic on Youtube and you can find Mylar bags and Oxygen absorbers on Amazon.

With Gas at $4+ a gallon, you'll want to squeeze out the best mileage from your vehicle as possible. Make sure it is tuned up at least once a year.  I see that most people drive around with low air pressure in one or more of their tires. Filling them to recommended air pressure will improve your overall gas mileage.  Other items would be to clean out your air filter and watch the way you drive. Coasting a bit more will give you a little more miles per gallon....

No comments:

Post a Comment