ALL THINGS BIG AND SMALL 2.0

Silver is extremely volatile. But there is an arguable case for having a small amount of Silver in your Gold portfolio to enhance its financial performance. (all numbers in USD) 1. The correlation of Silver with Gold is always positive, never negative. In other words when Gold goes up, Silver follows. Historically, R ranges from 0.5 to 0.8 2. Silver has a Beta of 1.2 to 1.6 against Gold. i.e. theoretically when Gold goes up by 1.00 Silver goes up by 1.20 to 1.60. 3. Silver’s reward/risk ratio (RRR). Its no use to apply statistical RRR like Sharpe or Sortino as Silver will be penalized for its volatility. But here,  here we are actually exploiting Silver’s volatility for our objective. 4. A common-sense way to estimate RRR for Silver is to take 50.00 as the downside (Silver has been above 50.00 since it broke through this level on 9 October 2025- that’s 55 weeks.) For upside we take the January 2026 all-time high of 120.00. So, the RRR is 120/50=240% 5. The affordability f...

  Richard Wagner's opera Gotterdammerung (Twilight of the Gods) depicts the curse placed on humanity for stealing the magic Gold from the River Rhine. Götterdämmerung is visually defined by a fiery, apocalyptic clash between divine light and absolute destruction, capturing the literal "twilight" or downfall of a mythic world.  I liken the US's  uniliteral suspension of  backing the USD  with Gold in 1971 (Smithsonian Agreement August 1971) as akin to Alberich the Dwarf's  theft of the Rheingold. Which began the gradual creation of the current unsustainable  US national debt leading to the coming financial Gotterdammerung.  Here is the math behind the unprecedented US national debt. -Size of debt as of today. $40 Trillion plus -US GDP $32 Trillion -Annual budget deficit $2 Trillion  -Unfunded liabilities (Social Security, Medicare, Veterans Benefits, Food Stamps $100 Trillion! - Debt/GDP ratio 125% -Annual interest payment 1 Trillon - Amount t...

  The two sets of charts [(1) Last week actual vs forecasted (2) The week ahead]  above  and the executive summary  below sums up all I have to say. But I would like to add that the day for a cataclysmic reckoning of the US national debt draws ever closer, accelerated by the stand-off in Iran. Also, the probability of this being triggered by the unwinding of the Yen Carry Trade is very real and could be very soon. Looking at the output of the Long Shot 95th quantile of our models, plus with US 30-year Treasury at 5.23 % and Japanese 30-year JGB at 4.02 %; plus AI Bubble burst and stock market crashing ,Gold at US$10,000 an ounce  and Silver at US$140 an ounce by year end is not an impossibility. Of course my opinion is ceteris paribus and rebus sic stantibus which are the legal terms  for "all things being equal" and "things as they are i.e. fundamentals remain unchanged" which in a Trumpian world can be quite a stretch of the imagination.  What the nu...

  24 JULY: KEY DATE FOR GOLD INVESTORS. A major regulatory enforcement action will come into effect on 24 July 2026 in China. Chinese mega-banks are officially shutting down all intermediary services for retail investors to trade leveraged and paper precious metals contracts linked to the Shanghai Gold Exchange (SGE). This action is being led by Industrial and Commercial Bank of China (ICBC)—the world’s largest bank by assets—alongside other state-owned giants like Postal Savings Bank of China, Ping An Bank, and China Guangfa Bank. • The Specific Targets: The ban completely turns off retail access to deferred delivery contracts like Au(T+D). These are the highly speculative, margin-funded instruments that allow ordinary retail investors to short or long gold using leverage through their mobile banking apps. • The Deadline Rule: After settlement on 24 July, retail traders can no longer open any new positions. Any remaining leveraged contracts must be manually closed out or taken to ...

 The above image shows two heatmaps (one with a 104 week rolling window  to capture the correlation and the other with a 26-week rolling window) of economic and financial  market variables that are known to be correlated with the price of Silver. By looking at the change in the degree of correlation of each variable in the 26-week heatmap from the 104-week heatmap, we can get a sense of the probable directon of each variable in the next few weeks. Data & Method Frequency: Weekly (W-FRI). Transforms used before correlation: • Silver, S&P 500, Gold, Brent, USD proxy: weekly log returns • M2: weekly log change • 10Y Treasury yield: weekly first difference (percentage-point change) Heatmap coloring: Fisher z-transform z = atanh(r) applied to the correlation matrix for improved visual scaling near high |r|. Cell annotations show the raw Pearson correlation r for interpretability. Tickers / Series:  Yahoo Finance: SI=F (Silver), ^GSPC (S&P 500), GC=F (Gol...

TOO GOOD TO BE TRUE? BUT THE MODEL PERFORMANCE DIAGNOSTICS ARE SO GOOD. (SEE LAST PARAGRAPH BELOW) WE SHALL SEE, WE SHALL SEE. EVEN IF Q50 IS ACHIEVED I AM SET FOR LIFE!   The most immediate impact of the current USA/Israel-Iran war has been the sharp rise in oil and LNG prices as Iran closes the Straits of Hormuz. According to the latest announcements by the US, Israel as well as the Iran governments, the war may likely continue for at least a few weeks or even a few months. I want to see if I can model the impact of changes in the macroeconomic environment which the war will inevitably cause, on gold and silver prices in 60 days from now.  This is a departure from my usual models using just XAUUSD, XAGUSD price data. The macroeconomic variables input variables are:  1. Inflation (FRED Core PCE) 2. The US Dollar (FRED nominal broad dollar Index DTWEXBGS 3. 10 -year Treasury yields 4. Equities (stock market) S&P500 The impact on gold and silver prices will dep...

  The media is reporting that investors are showing heightened interest in Gold, Silver and Platinum as alternatives to savings deposits, annuities and stocks. Here is a primer.  Gold, silver, and platinum are classified as precious metals because they are naturally occurring elements defined by three primary criteria: rarity, high economic value, and chemical resistance (for various industrial ushes). GOLD (XAUUSD) -Current Price: $5,108.25 USD (as of Feb 20, 2026) -Reserves: Relatively scarce; estimated 50,000 metric tons of economically viable reserves remaining globally - Mining: Primarily mined directly from gold ore deposits through open-pit and underground mining; also recovered from placer deposits - Top Producer: China (approximately 11% of global production), followed by Australia and Russia) - Investment Role: Premier safe-haven asset, inflation hedge, currency debasement protection, central bank reserve asset, portfolio diversification - Industrial Usage: Electroni...

A big thank you to EODHD.com for the data of XAUUSD and XAGUSD. Quality data at affordable price.   In times of uncertainty, investors turn to Gold. But spot Gold is now around USD4000 per troy ounce. On my trip down to www.indigopreciousmetals.com to buy bullion, I saw many people now buying Silver. Old folks, rich Indonesians and rich Indians. Why? Silver is not a Central Banks reserve currency like Gold, but it also has many industrial uses: See screenshot below. Besides the price of silver is only USD52 per troy ounce. XAU is Gold spot price XAG is Silver spot price. The 40 days ahead median forecast price for XAU is USD4208 and for XAG is 53.46. See charts below. [for methodology on Quantile Forecasts using Gradient-Boosted Decision Trees see previous recent posts on this blog ]. What is interesting is that proportionally speaking XAG has more potential than XAU. (The redline of XAG sits nearer the top of the green forecast band box.) And so if you look at the third chart be...

  Why? (1   - 60-70% of trades in the US equities market are done by automated AI-driven algorithms, including high frequency micro-second trading. These algorithms make their decisions not on economic or corporate fundamentals but on momentum, arbitrage opportunity, pattern recognition etc. (2  -  Previously the USD was a safe-haven currency that investors flock to in periods of economic, political or military instability. But with the chaos that is now going on in the USA, the USD seems to be losing its safe-haven status. As for Gold, it is still a safe haven asset, and recently we have seen the Central Banks of China, Russia, Japan and even some of the EU countires load up on Gold while paring down the amount of US Treasuries they hold. (3- The USD is the lynchpin that holds the US stock market and the Treasuries market together and a falling USD will make any rise in stock or bond prices unsustainable. Would you invest in US stocks if your profit is ...

  Introduction More important than the daily ups and downds of the Dow Jones, the S&P500 and the Nasdaq Composite is the big picture insights that can be gleaned from other asset classes such as the US Treasuries (Bonds) yield, the US Dollar, and the spot price Gold. Refer to the charts above. US Treasuries Yields (data from FRED the Federal Resserve Bank of Saint Louis) Theoretically Bond prices rise in an deflationary economic environment (i.e. their yields in % fall). Bond yields determine interest rates in an economy. So because demand for loans is low in slow economic growth conditions, interest rates charged by lenders e.g. banks fall, which means bond prices rise. This is because when interest rates fall, existing bonds with higher coupon rates (fixed interest payments) become more attractive to investors than newly issued bonds offering lower interest rates. This increased demand for the existing, higher-yielding bonds drives their prices up.  But our chart above s...