Gold-Silver Ratio

I am hedged on the precious metals with SLV puts and ZSL, among other things.  Gold would be the favored precious metal in a deflationary event.  However, the GSR does not yet indicate that precious metals trends have changed.  Silver is still the leader, and until a GSR trend change is confirmed, that remains the case.

A lot will depend on the Fed and its inclination to manage expectations.  I would think the markets are doing the heavy lifting for them right now, and with expectations being hammered back in line (really, is the herd worrying about inflation today?), we may be in the process of entering the next phase of the inflation without having to endure all that 'expectations management' stuff, which could include a harsh deflationary issue.

Meanwhile, my favored scenario involves a change in trend and a deflationary spook fest (and a resulting buying op in the precious metals).  GSR however, says 'nuh uh, not just yet Spanky'.

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