Precious Metals Ratios

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With all the action we’ve seen in the precious metals sector, I was wondering if comparing miners to gold, gold to silver, junior miners to regular miners, or any other comparison would create a flash of insight. I’m afraid not. Maybe my mind is too muddled, but after monkeying around with various arithmetic combinations, I have to warn you that this post is flash-free.

I did find the comparison of junior minors to the big boys to be mildly interesting; what we can certainly conclude from this is that as bashed as miners have been, junior miners have been getting uber-bashed. There’s been a flight to quality, as it were, although “quality” in this respect is a relative term.

0419-gdxratio

The comparison of gold to miners was a bit more interesting. Until February 2012, these two were joined at the hip, but after words, they completely decoupled. There was still gravitation influence, obviously, but miners started pulling farther and farther away from gold, and recently it’s been ab absolute free-fall.

0419-gldcompare

The zillion-dollar question, of course, is which will “catch up” – – do miners bounce back strong, having been so oversold, or does gold catch up with the miners that extract it? Only time will tell.