The relative strength of precious metals to the stock market is up.
This means your stock values are going down and the value of gold and silver are going up.
The stock market does not like inflation therefore it is going down amongst other reasons.
Gold and silver go up as a result of inflation, therefore gold and silver are moving up after the fact of oil and commodities went up.
Another reason gold goes up is inflation versus Interest rates.
When inflation rises above interest rates – gold goes nuts. Right now, inflation (as measured by the Consumer Price Index, the "CPI") is at 5%. The other major measure of inflation (the Producer Price Index, the "PPI") is running at an astounding 9.2% a year.
Today, we have the same inflation figures we saw in 1981-82. I don't know if you remember 1981... It was the last time inflation (as measured by the PPI) was this high. Even the CPI is currently at October 1982 levels of 5%.
With inflation running so high in the early '80s, interest rates on even "boring" Treasury bonds were more than 10%. But today, interest rates on Treasury bonds are only around 4%.
Right now, inflation is (conservatively) running at 5%. And Ben Bernanke is flat out telling us there's more inflation to come. Last week, he said, "Inflation seems likely to move temporarily higher in the near term." Yet somehow, Treasury bonds pay just 4%. When you add it up, you're actually losing a percent a year by holding Treasuries now.
Most of the time, gold doesn't do you much good in your portfolio. Since gold pays no interest, big investors choose to park their money in high-yield bonds, where the interest more than covers the inflation rate.
But now, putting your money in bonds doesn't even cover the rate of inflation. Sure makes gold look attractive...