In this report, I cover the early market action from London on Tuesday, July 16th, 2019. I look briefly at the precious metals, the stock market, the dollar, the bond market and the price of WTI and Brent crude oil.
Today I look closely at the gold to silver ratio of GSR and how the silver price has started to make a move relative to the gold price in the last couple of days. I look at the ratio in the short term, the medium term and the long term. Historically silver outperforms gold in a precious metals bull market so it is encouraging for precious metals investors or stackers that silver is starting to move. I do note nevertheless that a couple of day's move does not a trend make.
I will also look at another commodity today and that is iron ore. I look at how the price of iron ore has nearly doubled in 2019 but I also look at an FT article in which they look at some one-off events in Brazil and Australia that have impacted iron ore prices. Iron ore is the major alloy of the production of steel.
My conclusion is that the move in iron ore looks more than just a result of the events in Brazil and Australia and that it could mean a couple of things. The first one is that it could be a harbinger of stronger economic growth around the world or secondly that it could be a sign that investors could be losing faith in paper assets and moving towards tangible or hard assets.
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"China ‘cracks down’ with probe into iron ore price increase": https://www.ft.com/content/422819d0-9f08-11e9-9c06-a4640c9feebb
