Saturday, 15 December 2012

Why Gold is Behaving like Silver and Silver as Gold

Why Gold is behaving like Silver and Silver like Gold

Fiscal cliff, Eurozone crisis, China slowdown, Middle East show down, Emerging Market doldrums...there seem to be no dearth for negative news, one would say.
But what can explain gold's silver syndrome and silver's gold syndrome? It all started on November 28 when gold unexpectedly crashed on the Comex by around $26 dollar.Explanations vary. But since then gold has been undergoing turbulent times. It is as if gold is eclipsed by some sort of a volatility curse. Silver, since then has been volatile occasionally, but not to the extent that one may expect it to be.
Movement in Gold has been very volatile in the last 10-15 days even as silver is still trading range-bound. Upside movement in gold was much sharper than in silver from last month and technically as silver is in a consolidation phase, breakout above the level can make it much more bullish than gold. One may get the feel that silver is almost behaving like erstwhile (?) gold and vice-versa. So what can account for this phenomenon.
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