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Gold-Silver Ratio: Shrinking Along with Opportunity

25 Jul

Gold-Silver Ratio: Shrinking Along with Opportunity

Gold Market Discussion

On June 21, we wrote a blog post called “To Make Money Buy Silver.”  

It turned out to be pretty good advice.  Silver is up more than $1.00 an ounce since then.

Nice.  But experienced gold and silver investors and professionals watch something else:  the gold-silver ratio.

That’s because, in bull markets like this, silver often outperforms gold.    It’s something we’ve seen over and over again.  Experienced gold and silver investors and professionals want their portfolios to emphasize the precious metal poised to move up the most.

Since silver is now outperforming gold, there is a window of opportunity for you to increase your precious metals holdings with an easy strategy, one I have used myself for many years.

It’s called the Gold-Silver Ratio strategy.  The ratio is simply the price of gold divided by the price of silver.  In other words, how many ounces of silver it takes to buy one ounce of gold.

In a precious metals bull market like this, both gold and silver move higher.  But since we want to be in the one that moves the most, at these high ratios we recommend trading gold for silver.

Later, when the ratio is lower you can trade your silver back into gold with a net increase in the number of ounces of gold you own.

As you can see from the following chart, the Gold-Silver Ratio has been moving higher for some time.  Suddenly a couple of weeks ago it spiked briefly at 95 to one, turned around, and began to move sharply lower as we expected. 

Although it is moving lower, as I write this the ratio is still around 86 to one, still highly advantageous for you to take advantage of this strategy and increase your precious metals holdings without making any additional purchases. 

I urge to speak with one of our professionals.  Even if you didn’t buy your gold from us, they are happy to explain this powerful strategy in more detail and answer your questions.  We especially like this simple strategy for growing your gold and silver holdings because you are always invested in precious metals, moving into the precious metal that is relatively undervalued and therefore the one that promises the greatest relative price appreciation.

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