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Precious Metals
On the near-term, two indicators have been negative for the sector.
The Gold/Silver ratio has been rising. For a bull market in precious metals silver outperforms gold. Indeed, yesterday the ratio reached the 83 level, which compares to the high of 85 set with the collapse in crude prices in early 2016.
A rising gold/silver ratio indicates increasing financial pressures. Breaking above 85 would be a warning, but it could decline a little before that.
Another “Comfort” indicator is how well gold stocks have been performing relative to the bullion price. HUI/Gold is extending its decline.
The last good high on this indicator was 212 in 2016, with that sharp rally in the sector.
HUI jumped from 99 in January 2016 to 286 in July and it prompted the goldbug with the links to the CIA to forecast “$10,000 Gold”.
We noted the overbought and advised.
The sector could be positive with improving commodities and the general stock market into around May.
After mid-year, the Precious Metals Sector could be weak.