Relative Strength Ratios in Metals Markets Hit Rare Extremes
It’s possible last week’s cascading selling rout in palladium ended its multi-year bull market. The formerly white-hot metal lost more than $200/oz (but is beginning to rebound).
For now, however, palladium prices remain in a long-term uptrend above the bullishly aligned 20-week and 50-week moving averages – and physical supply remains tight.
A few days ago, platinum traded at a historically large discount of almost 50% versus palladium. That discount narrowed considerably last week with platinum managing to post a slight gain in dollar terms.
Another relative strength extreme that may be near a turning point is gold trading at 85 times the price of silver.
The gold:silver ratio ran up to its highest level since the early 1990s in last week’s trading, rendering silver a potential once-in-a-generation bargain opportunity among the money metals.
Silver is also deeply discounted versus the stock market. Last September, silver sunk to a 15-year low versus the S&P 500.
The tremendous strength in equities and bonds in the first quarter of 2019 makes silver once again stand out as extremely undervalued versus financial assets. (Browse silver products here.)