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For those contemplating venturing into the captivating world of precious metals, the question of whether to invest in gold or silver can often be the perplexing question on the tip of a smart investors tongue. A pivotal tool within the gold and silver stacking community, guiding these choices, is the renowned gold-silver ratio. This measuring tool unravels the mystery of how many ounces of silver hold the equivalent value of a single ounce of gold. As of this moment, in the realm of August 2023, the gold-silver ratio stands at 80, implying that 80 ounces of silver are required to match the monetary weight of one ounce of gold, considering the current spot price. Get it?? Youd need to sell 80oz of silver to afford 1oz of gold.....
Within the intricate dance of the gold to silver ratio, seasoned investors, like myself wield this ratio as a compass, steering their decisions on when to embrace silver or gold, while also orchestrating the timing for transitioning between these precious metals. For some, the equilibrium of 60 silver ounces to one ounce of gold represents fair value, a harmonious interplay between the two luminaries of wealth preservation. Ive had this conversation, many a time, with @silverd510 and were both on the same page when it come to flipping or doubling down when it comes to this magic ratio.
Recent times have cast a shadow on silver's luster, as gold has taken center stage. One prominent factor in this shift is silver's voluminous nature, demanding far more storage space compared to its golden counterpart. 800 oz of silver coins or 10 oz of gold makes hiding silver coins under your bed a very bulky choice. Gold, with its compactness and remarkable value, stands as a practical choice, especially for high-net-worth investors seeking efficient wealth storage. Central banks unprecedented gold acquisitions have fueled a surge in demand, creating an intriguing dynamic in the precious metals market.
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The current gold to silver ratio is technically a "man made" phenomenon, as Mother Nature herself shares her wisdom, revealing a natural gold-silver ratio of approximately 16:1. This means that the Earth's crust is believed to hold a bounty of only approximately 16 ounces of silver for every one ounce of gold unearthed, underscoring the deep-rooted connection between these two precious elements. However, navigating the terrain of the gold-silver ratio proves challenging, primarily due to the ever shifting spot prices of these metals. Historical data reveals a century marked by fluctuations, with the gold to silver ratio often hovering in the high teens. A striking exception was the remarkable 124:1 ratio witnessed in 2020, as silver prices plummeted and gold prices soared, a noteworthy anomaly in the precious metals saga. Smart investors could have made a pretty penny during these crazy times, simply by swapping out gold for silver and then back to gold as the ratio stabilised once again. A simple swap back in 2020, could have seen you bank an extra 44 oz of silver of pure profit!!
Anticipating potential market shifts, savvy investors anxiously watch for extreme disparities in silver's price relative to gold. This discrepancy could trigger a surge of silver flooding the market, driven by investors looking to offload their silver holdings. The opportune moment to sell emerges before this influx, during a phase when silver gains momentum against gold, leading up to a prospective zenith in the ratio. Over the past century, the average price ratio has settled around 48:1, rendering the current valuations between silver and gold price levels above the norm, deviating from the usual script. This discrepancy becomes more intriguing when considering silver's vital role in industrial usage over the past decade. Historically, dips in the gold to silver ratio have been fleeting, with silver's price surging swiftly, only to experience an equally rapid descent.
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Critics of the ratio trade argue that investors rarely acquire metals from bullion companies at the spot price. Take, for instance, the Silver Britannia coins, which often trade £6-8 above the intrinsic value of the metal. During periods of heightened silver demand, this premium can escalate further. This "true" gold to silver ratio encompasses the physical premium, adding a layer of complexity to the equation, and sparking debates within the investment circles.
When the gold to silver ratio climbs above 80, it's like a beacon signaling that it's the perfect moment to stock up on silver. When this ratio hovers between 80 and 50, it's like a balancing act, leaning more towards silver as the numbers climb higher. If the ratio drops below 50, it's a strong hint that focusing on buying gold is the way to go. Think of an 80 ratio as a historical whisper, saying, "Hey, silver is a steal compared to gold!" This ratio adds a fascinating twist to the precious metals world.
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So dont just keep your eye on the price, keep it also on the ratio... Thank you and youre welcome!!
If you dont own any precious metals, then why not tell us? As a community we encourage ALL engagements and encourage everyone to take the plunge and own at lease a sinlge ounce of silver or a fraction of gold. If your struggleing to find a safe and secure place to buy, reach out to the community as there is always someone willing to offer their time and advice to help you out.
40+yr old, trying to shift a few pounds and sharing his efforsts on the blockchain. Come find me on STRAVA or actifit, and we can keep each other motivated .
Proud member of #teamuk. Teamuk is a tag for all UK residents, ex-pats or anyone currently staying here to use and get a daily upvote from the community. While the community actively encourages users of the platform to post and use the tag, remember that it is for UK members only.
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Want to find out more about gold and silver? Get the latest news, guides and information by following the best community on the blockchain - #silvergoldstackers. We're a group of like minded precious metal stackers that love to chat, share ideas and spread the word about the benefits of "stacking". Please feel free to leave a comment below or join us in the community page, or on discord.
The ratio is everything…
I just have a hard time swapping silver for gold or gold for silver Lol!🤣
I just keep accumulating !☺️
Shall I start selling my silver?
This is a difficult one SS..@silvertop summed it up above. Its difficult for a stacker to sell anything. We just keep buying.
But if you can find someone in the community to swap with to avoid the dreaded premiums, then flipping silver for gold and back again can habe a big impact on the soze of your stack.
I think I have it all figured out... In Phase One of the Reset, the Silver/Gold Ratio will be 10 to 1... In Phase Two, it will be 1 to 1 and in Phase Three, it will be 1/2 Ounce of Silver for 1 Ounce of Gold...
I dream of being able to cash in on a ratio shift, I love me some silver but it do take up a lot of space
Hi @welshstacker,
Thank you for participating in the #teamuk curated tag. We have upvoted your quality content.
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Did you find your keys again? Lol
Yes, yes!!! I found it!!!
Yay! 🤗
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