Some interesting comments on the GSR below. "On March 1, 2016, the ratio was at 83.52 or at the peak level during the 2008 crash, when the price of silver was around its low. This indicates silver is due for a long and substantial rally. There may not be enough impetus for this just quite yet though."
Pete, when waiting to cross at an intersection, hitting the button 50,000 times won't make the little green man appear any quicker.
Bullshit!! The more times you hit the button, the better you feel. A pleasant diversion, makes the time pass quicker and thus the sooner the green man appears!
Whats to stop the gold to silver ratio just getting further and further apart? If only 13% of gold is used in industry compared to 50% of silver then silver is more an industrial metal compared to gold. If the % of silver usage in industry increases over gold % of today then the ratio of metal to metal in oz,s will not mean what it may have done in the past. If the price of silver goes up too much it will be non viable for the 50% used today to continue increased use. If there is no cheaper alternative to silvers industrial use then it must remain at affordable cost. It would be much easier to find an alternative to golds 13% use with rising prices than silvers 50% with rising prices causing an even greater ratio gap.
Whenever I see these arguments that the GSR is too high & must come down, all they ever do is reference the past. Guess what? The past has passed. And the GSR doesn't "have" to do anything. I'm more interested in the future. For once, I'd like to hear why Ag (or Au) is the better bet for the next 20 years -- *without* mentioning the past charts..
You don't use the GSR to decide whether gold or silver is better to hold for the next 20 years. That is a fundamental misunderstanding of the utility of the GSR. The GSR is simply an indicator that can be used regularly to decide when to flip between the two metals for profit, it is about the distance between prices rather than specific prices themselves, and it can be used as a signal on the price direction of one metal or the other. There are of course many factors that should be taken into account when attempting to project future prices. People shouldn't look at the current GSR and state "what it has to do" but should instead ask "what is it telling us?" They may say it is increasingly likely to go in one direction or the other and whether one metal will rise or fall relative to the other, but it is not some fundamental law. Since we don't get information from the future, the past is all we have to go on, and analysis has shown that utilization of the GSR as an investment strategy outperforms a buy and hold strategy over the long term. See: http://www.mcser.org/journal/index.php/mjss/article/viewFile/8673/8331
As some have pointed out in other threads, keeping a close eye on the GSR isn't very beneficial to most physical PM stackers but rather only to holders of paper claims to PM's who are interested in swapping the claims of one metal for another. I am purely a physical stacker and so the GSR really isn't vital to me at all even though it is an interesting comparative tool if for no other reason than to get a glimpse of what the general direction of the comparative sentiment toward each metal is. .
I'm no technical analysist by a long shot..... but isn't data accumulated from the PAST used to calculate the FUTURE direction of a share/commodity?
Well gold has to be the best "long term" metal investment if investing in metal because gold will always be regarded as the "precious metal" with silver the much poorer cousin. This is taught from childhood almost all over the world! Gold means wealth Silver does not unless its being used for cutlery and the like where this just shows the less wealthy the wealthy can even eat and drink from what they could barely afford to invest in. With jewellery people will always class silver as cheap so they prefer gold jewellery as to not feel cheap, some even buy rolled gold hollow gold and gold plate rather than silver! It cant be changed its in people minds it will be this way forever not just the next 20 years. This doesnt mean you cant make money and preserve some wealth with silver but if you have enough wealth already to invest in gold it shows you already have enough wealth not to worry about that gold making you more its just a preservation of that "abundance of wealth". What do silver stackers really think when they see fellow stackers trading in oz,s of gold? I know what I think, how the fcuk did they get that much wealth to be buying and selling oz,s of gold on an internet forum!
I like the 3 sister analogy. Should we also be looking at the silver to copper ratio? The SCR if you will?
No, definitely the cart can't come before the horse (figuratively speaking). If it seems as if that's what I was implying before, then I just wasn't being clear in my communication. .
Really? Screwed in what way? PM's dropping in USD denominated value? That could happen but my understanding was that if the USD tumbles, many investors would flock to safety which would be precious metals for some or many investors. Then supply and demand would drive the value of PM's up, up, up. .
Wait! What? What are you implying? That emotion can drive a market?! That some fictional standard can drive huge corporations that employ thousands of analysts, hundreds of actuaries and a few statisticians even could be moved by something as "inconsequential" as the GSR? To quote you: https://www.youtube.com/watch?v=fnyMUpPdVqw LOLz. EDIT: By the way - thanks for the reading and quoting your sources. For real.
