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 Replies: 20 / Views: 1,342 |
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Pillar of the Community
United States
533 Posts |
Currently at 85. Do you track that and does it influence what you buy? When it is above 80 I like silver
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Pillar of the Community
Canada
4647 Posts |
Totally and absolutely meaningless ,
the Gold Silver Ratio .
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Pillar of the Community
Canada
658 Posts |
Humanity is by nature, always seeking a pattern or linkage between disparate items. When the items are apparently similar then the desire is even greater. Both Gold and Silver are classed as precious metals but that is where any similarities end. There are different levels of supply available in the market and in the ground, their industrial uses are different, the demand for each is different. For a humorous look at humanity's desire to pattern match check out https://www.tylervigen.com/spurious-correlations. There you will see the uncanny correlation between the number of people who died by becoming tangled in their bed sheets and the per-capita consumption of cheese (a 94.7% correlation between the years 2000 and 2009) and the tragic impact on marriages in Maine as they relate to the consumption of margarine. The point is that just because you can define a correlation between two measurable items, that doesn't imply that there is causation. The question on gold silver ratio implies that there is an ideal value... given their different uses, demand and availability, any correlation between the two commodities is purely circumstantial. |
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Pillar of the Community
United States
957 Posts |
Thanks for the link, those are funny charts! I've seen a few comments on YouTube stacking channels who buy/sell using the ratio. I don't understand it, I just buy and hold. I suppose if someone has a specific amount of money they designate to go back and forth between metals, maybe they think the ratio shows directional trends. If I may contribute, here's a technical chart of people trying to predict future spot prices   Edited by livingwater
03/22/2023 10:06 pm
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Bedrock of the Community
Australia
20946 Posts |
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Pillar of the Community
United States
533 Posts |
Let's see considering since Ancient Rome to about 1900 the ratio of gold to silver prices was fixed by various governments the idea that they aren't somehow linked tends to fly in the face of 2,000 years of recorded history. They have only been "floating" for about 100 or so years
One of the first laws passed by the US congress in April 1792, the Coinage Act, addressed this in section 11
"Section 11. And be it further enacted, That the proportional value of gold and silver in all coins which shall by law be current as money within the United States, shall be fifteen to one, according to quantity in weight, of pure gold or pure silver; that is to say, every fifteen payments, with one pound weight of pure gold, and so in proportion as to any greater or less quantities of the respective metals."
You get oddities, like silver going over $40 in April 2011 but for the most part silver follows gold.
Buying the ratio, at it's simplest, works well with gold/silver ETF's. When the ratio is high you sell the gold ones and buy the silver, when low the reverse. The actual topline number doesn't matter you are simply trading gold for silver and back again when conditions are right.
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Pillar of the Community
United States
1932 Posts |
I buy regardless of price at certain times of the year. Over the last 2 years, I have been traveling to coin shows that are within a 2-hour drive. The prices are slightly better than the LCS and the sales tax is already included in the purchase price. Plus, the selection, experience, and atmosphere are better than going to the same LCS over and over. Most of my buying is in the first 4 months of the year as I put my tax return money and annual bonus towards coins. This is the time period of the best coin shows in the state generally, but I will buy here and there throughout the year as the budget allows.
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Moderator
United States
124696 Posts |
Quote:
If I may contribute, here's a technical chart of people trying to predict future spot prices 
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Pillar of the Community
United States
2350 Posts |
That's more trouble than it's worth! I like the realities of gold and silver values as the markets are just too volatile for dinking around with ratios.
If that's your thing though - go for it.
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Valued Member
United States
464 Posts |
The $GLD is closing in on 52 week highs & the banking issues we're witnessing, continuing fed rate hikes & a '23/'24 recession.... those will be the predominant catalysts which push gold & silver to fresh 52 week highs & will continue making higher highs into years end, IMO.
Edited by coin rejector
03/23/2023 3:19 pm
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Moderator
United States
44455 Posts |
Gold is not currently linked to the price of silver.
Show your support of the Coin Community Family (click here)See what CCF members have for sale (click here)See my collecting interest - (click here) |
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Pillar of the Community
United States
533 Posts |
That's like saying gold isn't linked to the value of the dollar. Technically true but over time gold rises when the dollar falls and falls when it rises
Except for some blips silver tends to follow gold. Chart it out over time
Edited by jaxenro
03/23/2023 7:22 pm
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Pillar of the Community
United States
2776 Posts |
I don't track it. Are you a trader or a stacker? IMO ratio is a trader play for the relatively short term, holding both metals. Sell gold to buy silver when the ratio is high, and vice versa when the ratio is low. "From around the end of 2008 to the middle of 2011, the gold-silver ratio declined from approximately 80:1 to around 45:1. During that period, the price of silver rose from around $11 an ounce to approximately $30 an ounce. The price of gold rose from approximately $850 an ounce to $1,400 an ounce. A 2008 buy of 80 ounces of silver against a short sell of one ounce of gold would have resulted in a profit of $1,520 in silver against a loss of $550 in gold, for a net profit of $970." https://www.investopedia.com/articl...er-ratio.asp "Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
03/23/2023 10:37 pm
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Pillar of the Community
United States
533 Posts |
"Are you a trader or a stacker?"
I didn't realize the two were mutually exclusive. I own both physical gold/silver and ETF's. I have no problem turning a profit trading and using it to buy physical with. I also trade in 1970's and 1980's luxury cars and funnel the profits into stacking. My goal is to increase my holdings using different legal means to fund that goal
Hypothetically if I have $2,000 to spend on stacking this month do I buy silver or gold? The ratio is one factor I look at as it transcends price. If it is above 80 I am more likely to buy silver, if below 60 I would look at gold more. But other factors come into play also like premiums.
My goal is to generate income to fund stacking and then spend that income in the most efficient manner
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Pillar of the Community
United States
2776 Posts |
I am only a stacker, and don't hold enough silver to use the ratio strategy. I see the logic of it though. If I sell an ounce of gold at 80 ratio I get 80 ounces of silver. When the ratio hits 40 I sell the silver and buy 2 ounces of gold. The size of my gold stack is now two ounces, and I wait for the ratio to rise again to sell the gold. It might take years or it might take weeks per iteration, but the net long term effect is a bigger stack.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
03/24/2023 1:21 pm
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Pillar of the Community
United States
533 Posts |
To me it is a factor. I try to buy consistently and the ratio helps determine which is a better buy at the moment but it is just one factor of many
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Replies: 20 / Views: 1,342 |
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Posted 03/22/2023 9:03 pm
