Gold silver ratio

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Thinking out loud here:



I don't see a good purpose for the GSR except as an attempt to evaluate which metal is currently a better buy.

The London price fix is what determines the spot price of silver and gold and ergo the GSR. Why is this a good way to determine the value of either metal and therefore why is this a good way to attempt to evaluate which metal is a better buy compared to the other?

I propose a different ratio....a Net Balance (NBGSR) (in tons) of supply and demand, gold to silver ratio. I think this would be a more instructive and valuable way of knowing which metal is a better buy than assuming that a GSR based on London price fixing is. A NBGSR would definitively show which of the two metals is being consumed at a higher rate in comparison to the available supply. This to me seems like a better way to gauge which metal is a better buy.

Perhaps the only drawback is that official figures for supply and demand are currently only available by quarter, I think. But it doesn't mean that there can't be a way to know weekly or daily increases of supply and demand if resourceful and smart people put their heads into it and publish such figures weekly or daily.


Your thoughts.
 
mmissinglink said:
Thinking out loud here:



I don't see a good purpose for the GSR except as an attempt to evaluate which metal is currently a better buy.

The London price fix is what determines the spot price of silver and gold and ergo the GSR. Why is this a good way to determine the value of either metal and therefore why is this a good way to attempt to evaluate which metal is a better buy compared to the other?

I propose a different ratio....a Net Balance (NBGSR) (in tons) of supply and demand, gold to silver ratio. I think this would be a more instructive and valuable way of knowing which metal is a better buy than assuming that a GSR based on London price fixing is. A NBGSR would definitively show which of the two metals is being consumed at a higher rate in comparison to the available supply. This to me seems like a better way to gauge which metal is a better buy.

Perhaps the only drawback is that official figures for supply and demand are currently only available by quarter, I think. But it doesn't mean that there can't be a way to know weekly or daily increases of supply and demand if resourceful and smart people put their heads into it and publish such figures weekly or daily.


Your thoughts.
Click to expand...
My problem with your "NBGSR" is the fact the countries that own all the gold (as most mined over history is still held) lease out and sell these holdings and that would mean the TRUE supply is far far greater than just yearly production.
 
sterling-nz said:
mmissinglink said:
Thinking out loud here:



I don't see a good purpose for the GSR except as an attempt to evaluate which metal is currently a better buy.

The London price fix is what determines the spot price of silver and gold and ergo the GSR. Why is this a good way to determine the value of either metal and therefore why is this a good way to attempt to evaluate which metal is a better buy compared to the other?

I propose a different ratio....a Net Balance (NBGSR) (in tons) of supply and demand, gold to silver ratio. I think this would be a more instructive and valuable way of knowing which metal is a better buy than assuming that a GSR based on London price fixing is. A NBGSR would definitively show which of the two metals is being consumed at a higher rate in comparison to the available supply. This to me seems like a better way to gauge which metal is a better buy.

Perhaps the only drawback is that official figures for supply and demand are currently only available by quarter, I think. But it doesn't mean that there can't be a way to know weekly or daily increases of supply and demand if resourceful and smart people put their heads into it and publish such figures weekly or daily.


Your thoughts.
Click to expand...
My problem with your "NBGSR" is the fact the countries that own all the gold (as most mined over history is still held) lease out and sell these holdings and that would mean the TRUE supply is far far greater than just yearly production.
Click to expand...



That would be taken into account, ideally.

My thought about the net balance would be cumulatively, not just based on one year. I know that some of the figures would likely be educated guesses, but the point is, with the figures that can be know with fair certainty, use those and those figures that can only be (educated) guessed at, use those because there's no better figures.




.
 
SilverDJ said:
Jislizard said:
Doesn't have to be soon, but sometime in the next 20 years would be nice.
Click to expand...

No compounded dividends for 20 years, sounds like a solid investment plan...
Click to expand...

Not an investment plan, an insurance policy. My investments are in property.

GSR of 79. Nearly 80 and I then exchange my last four ounces of gold (from the Self Managed Super Fund) for silver.
 
As I said in this piece http://research.perthmint.com.au/2016/01/04/ratio-trading-gold-and-silver/ a high ratio does not guarantee that silver will go up in dollar value, just that it may outperform gold - which it can do by falling by less than gold.

Also, a look at a historical chart shows that the ratio could continue on to over 90, which it has done in the past.

[img=GSR]http://research.perthmint.com.au/wp-content/uploads/2016/01/ratio3.png[/img]
 
I am not game to wait for 90. A bit over 80 to compensate for transaction fees would be nice though.
 
bron suchecki said:
As I said in this piece http://research.perthmint.com.au/2016/01/04/ratio-trading-gold-and-silver/ a high ratio does not guarantee that silver will go up in dollar value, just that it may outperform gold - which it can do by falling by less than gold.
Click to expand...

That's something many fail to realise. They think that if the GSR goes down then silver rises and gold must fall (or vice-versa). That's not how ratios's on essentially independent commodities work.
 
SilverDJ said:
bron suchecki said:
As I said in this piece http://research.perthmint.com.au/2016/01/04/ratio-trading-gold-and-silver/ a high ratio does not guarantee that silver will go up in dollar value, just that it may outperform gold - which it can do by falling by less than gold.
Click to expand...

That's something many fail to realise. They think that if the GSR goes down then silver rises and gold must fall (or vice-versa). That's not how ratios's on essentially independent commodities work.
Click to expand...


Look at a gold chart over the past 10 years and look at a silver chart over the past 10 years. If you can, overlay them. You will see they are not "independent" of one another vis a vis their movements.

Their directional moves are nearly identical, even though one may move more than the other in said same direction. Yes it is "possible" that gold can fall and silver stands still or gains, thus lowering the ratio, but that is not how it HAS happened in the past generally speaking and probably not going to be how it happens in the future, other than maybe for a short time due to some strange aberration. Everyone likes to discuss the theoretical when actually looking at the truth (real past actions) is what matters. It is "possible" I might win powerball tomorrow, but I would not "bet" on it (I'm buying a ticket tonight).

https://www.kitco.com/charts/popup/au3650nyb.html

https://www.kitco.com/charts/popup/ag3650nyb.html

Just my opinion.

Jim
 
Part of Jim's quote above, 'Everyone likes to discuss the theoretical when actually looking at the truth (real past actions) is what matters. It is "possible" I might win powerball tomorrow, but I would not "bet" on it (I'm buying a ticket tonight)."

Ha ha, reminds me of one of my dads sayings, "everyone wants to go to heaven ,but no one wants to die"

I'm definetly no expert on precious metals or investments generally, still I learn in my own way from this forum particularly, and questions raised here over time,

GSR, I like to think of silver going to $500 an ounce and the few meager ounces I invest in increase dramatically, a small amount of increase, I believe won't change your life dramatically. It would seem to me you would need say a thousand or so ounces.

Although any ulternative comodities may be very handy in a time of economical transition, or a seeming shtf scenario like what seems to be approaching on the world scene.

In my own research, I've a friend who's a very savvy accountant and businessman, to him silver, even gold are fairly unvaluable to day in relation to other investments, ie land, antiques, brickabrack etc.

He once summized much of his belief re gold and silver to me by saying, "gold and silver are only good in a crises situation as a way of parking your wealth till things settle down, I thought that was very interesting.

A song with a vague connection, hmm, https://www.youtube.com/watch?v=dmKeIlJq4gM stairway to heaven.
 
windmill2 said:
GSR, I like to think of silver going to $500 an ounce and the few meager ounces I invest in increase dramatically, a small amount of increase, I believe won't change your life dramatically. It would seem to me you would need say a thousand or so ounces.

.
Click to expand...
1000 is not even enough to make you much money.
When silver goes up $5 that will only be 5K.
10000 should be peoples first big milestone if looking to the future.
1000 is a good first milestone (and very exciting to achieve)
 
sterling-nz said:
windmill2 said:
GSR, I like to think of silver going to $500 an ounce and the few meager ounces I invest in increase dramatically, a small amount of increase, I believe won't change your life dramatically. It would seem to me you would need say a thousand or so ounces.

.
Click to expand...
1000 is not even enough to make you much money.
When silver goes up $5 that will only be 5K.
10000 should be peoples first big milestone if looking to the future.
1000 is a good first milestone (and very exciting to achieve)
Click to expand...



I'm still looking to get to my first 100 ounces. :cool:




.
 
10 100 1000 plus, I believe its horses for courses.
The more you have the more you have to find worthwhile investments , we just try and do best with what we have, learn, grow, enjoy , overcome. Imo
 
windmill2 said:
10 100 1000 plus, I believe its horses for courses.
The more you have the more you have to find worthwhile investments , we just try and do best with what we have, learn, grow, enjoy , overcome. Imo
Click to expand...
Of course that what it is all about.
I was just replying to the specific statement about "needing a 1000 ozt to make any money".
If you are going to make any real money on silver then you have t be getting it for free(like some of us do) or stacking 1000s and 1000s of ozt.
Unless there is the unlikely rocketship ride as with rhodium then i think the best people can hope to do is double or triple their money longterm.
10,100 or 1000 it is all relative as 10 to a destitute person could be a great hand up and 1000 to someone in a decent paying job is piss money for the year.
 
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