The precious metals market has started decoupling from global equities, according to National Inflation Association (NIA) which forecasted such an eventuality some months ago.
Also in an article posted two weeks ago in NIA's website, 'Don't Doubt Bernanke's Ability to Create Inflation' it said, Precious metals will decouple from the Dow Jones and we will begin to see gold and silver rise at the same time as the stock market falls. The decoupling NIA predicted is clearly taking place right now, NIA said in a statement.
The Dow Jones declined by 115.48 points today to 9,816.19, but the price of gold was up $26.80 to $1,244.50 per ounce. The Dow/Gold ratio is now down to 7.9.
NIA's top ten predictions for 2010 that was announced on December 21st, was that there could be a sharp decline in the Dow/Gold ratio from 9.3 to below 7.
One month ago with the Dow/Gold ratio at 8.7, NIA said, We expect this downward trend in the Dow/Gold ratio to accelerate in the weeks and months ahead. The downward acceleration in the Dow/Gold ratio is taking place exactly like we projected.
Silver was the big winner in recent days. Silver prices were up 5.4% to $18.24 per ounce. As you know, NIA has declared silver the best investment for this decade.
Silver still has a lot of catching up to do with gold. The gold/silver ratio is currently 68, up from 64 in December of 2009. NIA anticipates a major decline in the gold/silver ratio in the second half of 2010, NIA said.