Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why a Dow Stock Market Peak Will Boost Silver

Commodities / Gold & Silver 2024 Jun 20, 2024 - 07:16 AM GMT

By: Hubert_Moolman

Commodities

During the Great Depression, both silver (1931) and the Dow (1932) reached a significant low. Both have rallied significantly since then. However, the structure of the rallies was very different.

To date, the Dow has significantly outperformed silver since those lows. The Dow increased 988-fold from the low to the all-time high, whereas silver has only increased 179-fold from the low to the all-time high.


Here is a long-term comparison of the Dow, interest rates, and silver:

                       
The period from circa 1931 to now can be divided into an era of rising interest rates (1931–1982) and falling interest rates (1982–2024). During that period of rising interest rates, the Dow increased 26 times from the low to the high in 1973, while during the falling interest rate period, it increased 52 times from the low in 1982 to its 2024 all-time high.

Falling interest rates and a greater monetary base increase (11.74 times vs. 33.2 times) were evidently better conditions for the Dow. On the other hand, though, silver has a different relationship with interest rates.

During the period from 1931 to the Dow peak in 1973, silver only increased 8.9 times. This does not compare well to the Dow’s 26-fold growth during the same period. However, after the Dow's peak in 1973, silver rose much faster. In fact, silver increased about 25.5 times from the silver price at the 1973 Dow peak to the silver high in 1980. This resulted in an overall 178.57-fold increase from the bottom (1931) to the top in 1980.

This means that ultimately, during that cycle, silver significantly outperformed the Dow (178.57 vs. 26).

During the period from 1982 to 2024 (the falling interest rate period), silver increased about 14-fold from the low (1993) to the high (2011). Again, this does not compare well to the Dow’s 52-fold growth during the same period. Will silver again rise much faster after the Dow peak is in? If this is the case, then a confirmation of a Dow peak (similar to 1973) is a much awaited signal for Silver bulls (get more insight from my premium blog).

If silver again outperforms the Dow to the extent it did during the early cycle (1931–1988), then we could see some crazy high silver prices (just do the calculations for yourself).

A chart I posted previously also points out the significance of the next Dow peak for future silver prices:

           
For more of this kind of analysis, I have a Premium Service as well as a Silver Fractal Analysis Report that provides more insight regarding the gold and silver markets.

Warm regards,

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2024 Copyright Hubert Moolman - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in