Gold/Silver ratio

The gold to silver ratio has fallen to 59.7, recently. This is the best its been since the 2008 market crash. I keep a close eye on this as I think a ratio of 55 is the time to sell. With gold at $1320 an ounce, that would put silver at $24.

I know some of you don't believe in the ratio or think it means anything, and that fine....you are entitled to your own opinion. I'm just pointing out that things are correcting as I said last year that they should.

 

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You can make ratios out of pairs of anything with a price. It isn't useful unless it is predictive, and the gold/silver ratio isn't predictive.

 

With a sign on name like SilverSurfer, I was surprised to read the word "sale" in the OP.

Maybe I am a weird-do. The thought of saling my coins is not something I like to entertain. I know I can't take them with me come cemetary day.

Personally, I like to follow ratios. Ratios are numbers, and numbers usually mean something, even if do not currently understand what that meaning is.

Another opinion I have is that future days may not be much like past days and trends in terms of size. I feel like the 1930 might look like the little cousin to the Giants forward. I do however believe in bubbles, and the path that leads to them. I think the path to the bubble in gold and silver may be a long way off longterm. No good reason for my thinking. I will add that it helps me to sleep at night to have a few coins.

 

For those following the gold/silver ratio, it is now at 57.9. With Gold at 1351, silver would be $24.56 if the ratio was 55.

 

Can you post a link of things correcting as you said last year? Was it on this forum and are there any sites that promote this ratio theory?

 

There are several sites....you can do a search for "gold silver ratio and silver gold ratio." You should get several hits. You can also search this site for the same. The idea is based on the cost of processing a gold bullion coin to a silver bullion coin. Gold is about 55 times more expensive to mine and acquire, hence the 55 to 1 ratio.

 

i remember in 1980 when silver hit $50 an ounce and gold hit $800 (not sure of the exact numbers)

that would put the ratio at around 16:1

it was a high on both that stood for over 25 years ...

today, silver is still more than 50% off that high
while gold is up over 60% from that local top

It makes me think silver is a better bet for gains from here.
But who the heck knows ... really

 

LOL. Because I too cannot bear to part with a coin. However, by selling some surplus silver, I can buy some items I want to complete my sets. And today, coin values have fallen dramatically. This is the way I can afford to get a few more things. But it's hard mentally to ever sell something.

 

I'm sorry, I thought this was the bullion investing portion of this site. Some people just bought junk silver to sell when the price goes up. Or we bought ASE, with the same idea in mind. I'm just trying to establish a good selling point.

As for silver at 16 to one.....Hmmmm, what was going on in 1980 that would cause that?

 

Here is the history on the 1980 bubble in silver (Hunt Brothers corner silver market)



Beginning in the early 1970s, Nelson Bunker Hunt and his brother William Herbert Hunt began accumulating large amounts of silver. By 1979, they had nearly cornered the global market. In the last nine months of 1979, the brothers profited by an estimated $2 billion to $4 billion in silver speculation, with estimated silver holdings of 100 million ounces.


During the Hunt brothers' accumulation of the precious metal, prices of silver futures contracts and silver bullion during 1979 and 1980 rose from $11 an ounce in September 1979 to $50 an ounce in January 1980. Silver prices ultimately collapsed to below $11 an ounce two months later. The largest single day drop in the price of silver occurred on Silver Thursday (27 March 1980)


The Hunt brothers had invested heavily in futures contracts through several brokers, including the brokerage firm Bache Halsey Stuart Shields, later Prudential-Bache Securities and Prudential Securities. When the price of silver dropped below their minimum margin requirement, they were issued a margin call for $100 million. The Hunts were unable to meet the margin call, and, with the brothers facing a potential $1.7 billion loss, the ensuing panic was felt in the financial markets in general, as well as commodities and futures. Many Government officials feared that if the Hunts were unable to meet their debts, some large Wall Street brokerage firms and banks might collapse.[2]
To save the situation, a consortium of US banks provided a $1.1 billion line of credit to the brothers which allowed them to pay Bache which, in turn, survived the ordeal. The U.S. Securities and Exchange Commission (SEC) later launched an investigation into the Hunt brothers, who had failed to disclose that they in fact held a 6.5% stake in Bache.[3]


Hunt filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code in September 1988, largely due to lawsuits incurred as a result of his silver speculation.
In 1989 in a settlement with the United States Commodity Futures Trading Commission, Nelson Bunker Hunt was fined US$10 million and banned from trading in the commodity markets as a result of charges of conspiring to manipulate the silver market stemming from his attempt to corner the market in silver. This fine was in addition to a multimillion-dollar settlement to pay back taxes, fines and interest to the Internal Revenue Service for the same period.

 

And so why would you think silver would ever return to 16 o 1? I'd say at best, what you will see is 40 to 1....but that is in your wildest dreams. I do believe 50 to 1 is possible, but on a longer term scale. I'm curious to see where we end up on near the new years.

 

who said it would return to 16:1 ?

 

I think the ratio may be affected by the soaring price of gold ? When gold takes off like a rocket, many buyers go to silver because it is more affordable. People can buy a roll of quarters who cannot afford a double eagle,

This economy has everyone in a hedge mode and there are many more PM buyers than ever before. I think the smaller buyer is having a huge effect on the upward momentum. IMHO

 

I believe the Hunt brothers also shipped several thousand tons of Silver by freighter to Northern Europe in the late 60's and early 70's to create a shortage in the US ? At least that was the rumored information published at some point. The Hunts were also rumored to have sold "short" as the price began to fall.

I do remember that after the bankruptcy one of the brothers (Nelson, I think) purchased 5 ancient Roman coins for $6.500,000 from a wealthy collector. Chump change, I guess.

 

can't believe it. the ratio between gold and silver went down from over 68 to 1 to just 55 to 1. well. before high is over 80 to 1 and low at 16 to 1.

 

Silver has far more industrial applications than gold. There are few legitimate substitutes for it, and even as its demand in photography has diminished over the past few years, it constantly reinvents itself in industry.

As 10Gary22 already stated.....with gold remaining at its high level We are seeing many people gravitate towards silver. China is seeing it regarding jewelry and investing.

I don`t think gold is in a bubble, but silver has a far greater ceiling right now. The gold/silver ratio is going to slowly diminish for a long time.

 

the ratio between gold and silver might get closer and closer at 40 to 45 : 1 within one or two years.

 

I saw the ratio at 56 to 1 today. With gold at 1381, and silver at 24.62. The ratio still has more to correct, I'm still thinking 55 to 1 is the time to sell, maybe 54.5 to 1. I'm not selling all, but taking some profits when the ratio has corrected was my first goal. Then I can buy the gold I wanted with the profits made from the silver. This is working out beautifully. I think another market crash will cause silver to drop a lot faster than gold. Nothing says I can't buy back in.

With gold at 1380 on average now, that puts silver at 25.32 if the ratio were 54.5 to 1.

 

:d

 

Well, it's been a while, but I did see silver reach ~$29.30 while gold was at ~$1430. This made the ratio 49 to 1 briefly.....it didn't last as the margin was increased by 30%, I'm sure forcing a few over leveraged traders to have to sell, which sparked further selling. As of now silver is ~$27.30 and gold is ~1400. This makes the ratio 51 to 1.

I'm not sure the ratio will get much better than this. So, now it's golds turn to ascend higher in order to take silver with it. $1500 gold, anyone? 50:1 makes the price of silver $30.