In another article about the gold-silver ratio, Adrian Douglas states that he believes silver has broken free of its long-term relationship with gold. The crux of the argument appears in the diagram below.
The above is a 2-dimensional phase space for the gold-silver price system. The upper trend line shows the relationship between gold and silver prior to the 2008 commodity price collapse. The lower trend line shows the relationship between gold and silver since the commodity price collapse.
In the past few months, the silver price has rallied impressively (red ellipse), but is too soon to tell whether silver is breaking out or returning to the pre-price-collapse trend.
The above is a 2-dimensional phase space for the gold-silver price system. The upper trend line shows the relationship between gold and silver prior to the 2008 commodity price collapse. The lower trend line shows the relationship between gold and silver since the commodity price collapse.
In the past few months, the silver price has rallied impressively (red ellipse), but is too soon to tell whether silver is breaking out or returning to the pre-price-collapse trend.
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