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Gold still expensive relative to other commodities

FXStreet (Mumbai) - Despite the rout in Gold, the metal is still highly expensive relative to Silver and other commodities.

The gold silver ratio currently hovers at the five-year high levels which may be indicative of further decline in gold prices. One ounce of the yellow metal is fetching more than 74 ounces of silver, the most since March 2009. Silver has outpaced gold's declines since the end of 2012, falling 49% till yesterday, while gold dropped 32%. Moreover, the gold silver ratio is climbing because Silver has more industrial uses and the weak demand due to global growth slowdown is further affecting the prices. On the other hand, Gold usually finds support on safe haven appeal during the times of economic slowdown.

Meanwhile, the yellow metal is relatively expensive to some other commodities as well. With crude, its ratio reached highest in 17-months during the last week.

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