The collapse in Silver has come at a very significant mathematical level. It is now probable that the Silver / Gold ratio is in a new bear market and this should mean pressure on “risk”. The overall commodity index has also reversed at a classic ratio level with the help of a much heralded commodity IPO providing the icing on the cake of extreme bullish sentiment. However, Copper and Agriculturals are clinging on to bullish potential.
Murray Gunn,
HSBC Global Research