As the ratio begins to rollover when the Dow enters its next bear market and gold begins the final, violent leg of its secular bull market advance, the Dow/Gold ratio will begin the journey to a ratio of between 1/1 or 2/1, from its current elevated ratio of roughly 17/1. Either way, that will mean skyrocketing gold prices for the gold bulls that have not been shaken out by the brutal bear market.
The chart below is a look at the Gold/Silver ratio over a 52-year time period.
52-Year Chart Of Silver vs Gold
You can see the massive outperformance of silver vs gold in 1980 and 2011 (with the price of silver highlighted in orange). Even as the price of gold begins to massively outperform the Dow, culminating in a cycle that ends at 2/1 or 1/1 on the Dow/Gold ratio, silver’s price advance will be even more remarkable. For the silver bulls that have remained strong it will be one heck of wild ride.
The Bottom Line
The bottom line is that this massive secular bull market in gold and silver will be one for the history books before it is over, and no government or set of governments or central banks will be able to stop it. The artificial paper price manipulation (that currently feels like it will never end) will fail just like it did for the London Gold Pool in the late 1960s. And when it fails, the upside gains in gold and silver will be breathtaking.