We were privileged to kick off the month of December yesterday (Friday) by taking coffee late in the trading session over at “the club”  with a great and good friend of The Gold Update. In sharing the screen over which we’d been brooding since midnight of the S&P 500 futures, their having floundered on the Flynn Follies, only to recover in anticipation of the Senate’s having enough votes (51-49) for its version of the tax bill, (next to be co-mingled with the House version), our topic swiftly switched to the precious metals. For in the microcosm of a single trading session, we were seeing just how untoward  Silver has been treated — at the very least — throughout this year.

To be sure, intra-session the metals had managed some bounce during the stock market’s trounce. And as all of you know, generally Silver benefits as a precious metal when Gold rises — and benefits as an industrial metal when Copper rises; where Silver oft is torn is when Gold and Copper move in opposite directions to one another, (although broadly, Silver has a more precious than industrial bias).

So as we glanced at the live percentage changes to that point of the trading day, we saw Gold +0.4% and Copper +0.8%: thus Silver must obviously also be up, right? Wrong: -0.4%. To reprise our favorite John McEnroe shock-quote: “You CANNOT be SERIOUS!” Moreover, is it any wonder the Gold/Silver ratio is as high as it is? No, it isn’t:

And you know the drill: that ratio’s millennium-to-date average is now 62.8x … but the ratio itself is presently 77.9x … raising the denominator (i.e. regressing Silver to the ratio’s average) puts her price up at 20.44 (vs. yesterday’s settle of 16.47). Further as we oft quip, that’s before the overshoot. But wait, there’s more: the price of Gold doubling from yesterday’s settle of 1283 would put it at 2566, 33% above its All-Time High of 1923 (02 September 2011) … yet the price of Silver doubling would put her at 32.94, 34% below the All-Time High of 49.82 (25 April 2011). A word to the wise is sufficient.

Now one final point with respect to the above Gold/Silver Ratio chart: see the three prior major peaks above 80.0? The first one came in June 2003: a year later Gold was 6% higher, but Silver 28% higher. The second peak came in November 2008: a year later Gold was 47%, but Silver 107% higher. The third one came just last year in March, a year later then finding Gold actually 2% lower, but Silver 18% higher.“Got Silver?“ Wow.