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What happened on Friday? It appears that PM money managers were allocating away from SILVER and buying GOLD with the proceeds. Could this be start of a trend whereby GOLD outperforms SILVER? I do believe as long as GOLD moves higher, SILVER will not fall, but will follow along like it used to when GOLD outperformed prior to the fall of 2010.

Dunno. I have both, so am cheering both on, but have a bit more silver than gold now, so might have to reallocate if this becomes a new trend. I think Gold had just gotten so far behind that it was due. And Silver seemed to need a couple of days of rest after the mania earlier in the week.

Any real evidence that managers were actually choosing to allocate away from silver to gold, rather than just reacting?

I saw more then one source that was telling folks to diverge into gold from silver at this point.... In the short rn it could easily be right imo, gold hasnt moved as fast as silver lately. But I still think silver will outperform gold overall, for some time to come....

Country wrote:What happened on Friday? It appears that PM money managers were allocating away from SILVER and buying GOLD with the proceeds. Could this be start of a trend whereby GOLD outperforms SILVER? I do believe as long as GOLD moves higher, SILVER will not fall, but will follow along like it used to when GOLD outperformed prior to the fall of 2010.

They probably felt, as do many, that silver has made a significant rise in the past several months and is overdue for a pullback. They are locking in profits, and parking them in gold, which is "safe" and which may be due to rally itself as silver corrects and/or consolidates. I also think that gold, being a vastly larger market than silver, is not as easy to cap price rises. As the public perception fastens on gold it may be the next beneficiary of depreciating dollar dismay, but silver will have it's turn again.

CME Group and MF Global have both been raising their margin requirements for silver these last few days, which puts downward pressure on the price. Here's an article from November 2010 showing what happened to the silver price when CME raised their margin requirements by 30%.

I believe that the ratio of 32:1 is as good as it will get for now and gold is cheap right now compared to silver.
Many, including me probably believe that gold will remain more stable than silver in the next couple of months.
Sell some silver and convert it to gold. Buy the silver back when it tanks.