Wednesday

Sugar versus Silver Comparison Charts

Post a Comment April 20, 2011 – 2:06 am |   | Permalink |  Print This Post |

Sugar Chart 2002-2011

Post GFC - $9 to $37 (~400% rally to peak) before 30% pullback

Sugar Chart

Silver Chart

- Post GFC - $9 to $44 (500% increase) - ?pull back due?

- Silver is currently trading at $44 ——————————————————here on the chart—>     X  45.000

Silver Chart 2011

Looking further back

200 year Chart

Silver

Highest month end was $38 per troy ounce in January 1980 (but intraday high was $49.45 during the Hunt brothers manipulation of silver)

At the time of writing, silver is at nominal high at $44.30 per troy ounce.

screen-shot-2011-04-20-at-34925-pm

Sugar

- still far from nominal high $57 cents per pound reached back in 1975.

Sugar 200 year Chart

Conclusion:

1. Trade idea - long sugar, short silver on an equal weight basis.

Whilst we are bullish on commodities in general, nothing moves up in a straight line. Looking at the sugar price chart above we see huge fluctuations in price (30% retracements) on its way up. We are not brave enough to short silver without any hedging in place just in case the much talked about “hyperinflation” sets in. The assumption with a sugar long hedge is commodities (soft and precious metals) will rise in tandem as part of the inflation trade.