Why a Dow Stock Market Peak Will Boost Silver / Commodities / Gold & Silver 2024

During the Great Depression, both silver(1931) and the Dow (1932) reached a significant low. Both have rallied significantlysince then. However, the structure of the rallies was very different.

To date, the Dow has significantlyoutperformed silver since those lows. The Dow increased 988-fold from the lowto the all-time high, whereas silver has only increased 179-fold from the lowto the all-time high.

Here is a long-term comparison of the Dow,interest rates, and silver:

                       
The period from circa 1931 to now can bedivided into an era of rising interest rates (1931–1982) and falling interestrates (1982–2024). During that period of rising interest rates, the Dowincreased 26 times from the low to the high in 1973, while during the fallinginterest rate period, it increased 52 times from the low in 1982 to its 2024all-time high.

Falling interest rates and a greatermonetary base increase (11.74 times vs. 33.2 times) were evidently betterconditions for the Dow. On the other hand, though, silver has a different relationshipwith interest rates.

During the period from 1931 to the Dow peakin 1973, silver only increased 8.9 times. This does not compare well to theDow’s 26-fold growth during the same period. However, after the Dow's peak in1973, silver rose much faster. In fact, silver increased about 25.5 times fromthe silver price at the 1973 Dow peak to the silver high in 1980. This resultedin an overall 178.57-fold increase from the bottom (1931) to the top in 1980.

This means that ultimately, during thatcycle, silver significantly outperformed the Dow (178.57 vs. 26).

During the period from 1982 to 2024 (thefalling interest rate period), silver increased about 14-fold from the low(1993) to the high (2011). Again, this does not compare well to the Dow’s52-fold growth during the same period. Will silver again rise much faster afterthe Dow peak is in? If this is the case, then a confirmation of a Dow peak(similar to 1973) is a much awaited signal for Silver bulls (get more insightfrom my premium blog).

If silver again outperforms the Dow to theextent it did during the early cycle (1931–1988), then we could see some crazyhigh silver prices (just do the calculations for yourself).

A chart I posted previously also points outthe significance of the next Dow peak for future silver prices:

           
For more of this kind of analysis, I have a PremiumService as well as a SilverFractal Analysis Report that provides more insight regarding thegold and silver markets.

Warm regards,

Hubert

“And it shall come to pass, that whosoevershall call on the name of the Lord shall be saved”

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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