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BMO: gold-silver ratio hits record high as prices sink

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The gold-silver ratio has hit a record high of around 120 on recent heavy selling in precious metals that were probably “overdone” but occurred amid a rush for cash, said BMO Capital Markets. The ratio measures how many ounces of silver it takes to buy an ounce of gold, with a rising number meaning silver is underperforming gold, and vice-versa. Gold is more than $200 below the seven-month high hit earlier this week. “However, investment outflows have hurt the other precious metals much harder,” BMO said. “Platinum prices have dropped 25% over the last week to ~$650/oz, the lowest since 2003. Meanwhile, silver dropped 26% to ~12.50/oz, the lowest since 2009. With this, the gold-silver ratio is at a new record level of 120x. We see these moves as overdone, but while there is a rush to cash, such liquid assets will face disproportionate selling.” still, BMO added, holdings of gold, silver and platinum by exchange-traded funds are all still higher for the year to date.

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