gold/silver Ratio under 80:1

IrishGuyIrishGuy Posts: 181 Bronze ✭✭✭
Hi
Been a while but silver has broken the 80:1 barrier.
Asked this before but where does everybody think it will end at the lows
70:1? Next stop will be its last
50:1? Long term average
15:1? Set when silver was money
9:1? What is believed to be ratio in the ground
X:1


https://www.kitco.com/Gold_Silver_Ratio_Charts/gold-silver-ratio-charts.html

Comments

  • nienie Posts: 129 Bronze ✭✭✭
    9:1 would be great but I think 45:1 is more realistic.
  • IrishGuyIrishGuy Posts: 181 Bronze ✭✭✭
    edited September 5
    @nie thanks
    I agree and would be happy with 45:1
    Maybe I am wrong but most people do not seem that interested in the ratio (again could be very wrong) but I find that this platform is ideal for playing this ratio.
    Swap from Gold to sliver in the 80 to 90 ratio and sell when the ratio drops as it always does and potentially double your gold stack by just having your silver do the work for you over time.
    Even if the ratio does not change, silver is the better candidate to increase which needs to increase nearly 3 fold to make it back to all time high of $50 while gold only has to go up by a 1/4 of its value for it to be back at all time highs

    Would like to hear where my logic may be wrong?
  • SpontaneousOrderSpontaneousOrder Posts: 302 Bronze ✭✭✭
    Last month a Goldmoney Insights article Silver prices with explosive upside demonstrated that silver has a discontinuity in it's supply/demand curve at the point where byproduct silver from other mining operations is no longer enough to satisfy demand. Speculators could trigger that event, and cause the price to spike.

    On the other hand, it may the case that today silver might be less important as a monetary metal than it used to be. Silver was once the "poor man's gold" because a single gold coin is so costly. But with a Goldmoney holding, one can easily buy any fractional oz. amount of gold so this is no longer a factor. And gold is much cheaper to store and transact in than silver. A fall in demand on the part of investors for silver coins could relegate silver to the status of just another industrial metal.

    It will be interest to see how these two opposing dynamics play out against each other.
  • GoldNRollGoldNRoll Posts: 209 Bronze ✭✭✭
    "On the other hand, it may the case that today silver might be less important as a monetary metal than it used to be. "
    Good observation @SpontaneousOrder
    Unlike gold, in the EU, silver has a VAT of 19-24% depending on the country. Even the swiss have 8% VAT on silver. How is silver taxed in the US?
  • SpontaneousOrderSpontaneousOrder Posts: 302 Bronze ✭✭✭
    @GoldNRoll a few states in the U.S. charge a sales tax I think, for gold and silver. Here in Texas though, where I am, there is no sales tax on metal purchases. Have to pay capital gains taxes to U.S. I.R.S. when selling metal.
  • GoldNRollGoldNRoll Posts: 209 Bronze ✭✭✭
    @SpontaneousOrder Thanks for the info!



    The gold/silver ratio was as low as 14 in 79, and 100+ ten years later. The all-times trend is upwards. Difficult chart to explain.
  • IrishGuyIrishGuy Posts: 181 Bronze ✭✭✭
    Hi @SpontaneousOrder @GoldNRoll

    Personally I do not think this to be true "On the other hand, it may the case that today silver might be less important as a monetary metal than it used to be. "
    Firmly believe the substitute effect kicks in. By that I mean if Gold is to expensive or hard to locate, people switch to silver.
    http://silverseek.com/commentary/india-silver-imports-tripled-july-prices-rise-17748
    In India they move to Silver when gold goes up in price to much.

    I know it is anecdotal but when I was in California a few months ago, when gold brought through support, I called to a coin dealer, and he was pretty much out of stock of gold coins, but his regular customers just switched to Silver.
    Interestingly his offers are all silver related at the moment which seems to tell me that is still the case.

    Having said the above, the ratio is back above 81 as I type this. One thing is certain Silver is very volatile.
  • SpontaneousOrderSpontaneousOrder Posts: 302 Bronze ✭✭✭
    Monetary Metals offers the Gold Exponential fund, which trades the gold-silver ratio, and they have some proprietary methods of estimating where the ratio is headed.
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