Gold to Silver
Recently, the Gold to Silver ratio has kicked off a 30 year extreme in less than six weeks. The last time we saw this ratio was back in 1993. Historically, the rate is about 45 ounces of silver to one ounce of gold. The average ratio since January of 1990 is about 65 ounces. Now, the ratio remains at 92.48, and this is the highest value since March 1993.
How do we calculate the gold to silver ratio?
There are many techniques to measure the ratio, but here is a simple way: divide the gold price by the silver price. In general, we are trying to figure out how many ounces of silver it takes to buy one ounce of gold — the ratio change with metal prices. When silver is high with a low gold price, then there is a low gold to silver ratio. Meanwhile, if the price of silver is low, but with a high gold price, it is a high gold to silver ratio.
In this case, it is a high Gold to Silver ratio — a similar result developed in silver prices due to what’s been happening to gold. The price of gold shot up from $1,284.55 per ounce to $1,424.91 per ounce in just six weeks. We are talking about an increase of 11% progress in a short amount of time.
What does it mean for investors?
Precious metals, especially gold, are investor’s safe haven. Investment in gold provides the investors with a place to stash their cash to avoid losses. Besides, the economic forces are driving smart money in that direction. On the other side of the world, the European Banks have negative interest rates, and they are charging people to keep their cash. At the same time, the U.S Federal Reserve stated it would cut interest rates. Long story short, the investors do not rely on U.S bonds to pay for them due to the ongoing trade wars between the U.S and China.
Why Gold and Silver ratio hit a new extreme?
Investors are piling into gold. The gold future is expected to rise continuously in the next several months and maybe even till the end of the year. There are no expectations for gold prices to fall at the moment. Silver obtains its value, and silver prices will increase through bargain hunting. The silver price requires raising at least 38% to get the gold to silver ratio back to average. Indeed, silver prices could go up so much far with the upcoming spot prices.
Why should I sell Gold?
Right now is an excellent opportunity to sell Gold since the prices are at its all times high. Bullion Exchanges buy a variety of products including precious metals that range from the ever-popular gold and silver to platinum and palladium.