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Gold/silver ratio record high...... Crisis coming? - Zeal Capital Market

Gold/silver ratio record high…… Crisis coming?

18-03-2020 09:47

With the global financial market turbulence, silver, one of the commodities, also collapsed. Although gold also fell as much as 250 US dollars from the top, the gold/silver ratio rose to 123 level, a record high.

The global pandemic of the new coronavirus are expected to cause unavoidable harm to the global economy. As more and more countries closed the border to implement strict measures, regardless of Asia, Europe, and the United States, have suffered considerable impacts. The stock market and commodity market have got heavy hit.

Many analysts have noticed that the gold-to-silver ratio has made history and at the same time implied a big crisis in the financial market and the possibility of deflation. Analysis believes that usually when inflation expectations fall, the gold-silver ratio will rise. Falling in inflation expectation will force central banks to cut interest rates, and low interest rates will push up the gold price.

At the same time, due to the gloomy economic outlook, silver is facing a big negative factor as it depends on relatively large extent of industrial demand. Even if inflation expectations fall, or even deflation, is also negative for gold, the overall performance of gold is still better than silver.