the gold/silver ratio virtually unchanged after 1 decade

finicky

finicky

Well-Known Member
Silver Stacker
I was just browsing the charts on SStkers and took in the decade gold to silver ratio chart. Amazingly to me this ratio is at the same level as a decade ago. So much has been thrown at this ratio and the supposed unreality of silver being so cheap relative to gold yet the ratio has bobbed back to what looks like the mean. All the dozens of reasons given 10 years ago as to why this ratio was unsustainable: Silver being use up industrially, silver too cheap to stimulate primary mining, the silver hoard of US Government liquidated, silver industrial applications growing by the week, all the easy silver already found and mined .. all these differences to gold pointed out and argued more than 10 years ago, conditions sustained over an extra 10 years, yet the relative value has not budged one inch.
April '04, ratio between 60 and 70, April '14, ratio between 60 and 70. Elevator up in '08, elevator down in '10, and back to the same level , Makes 60-70 look like the mean in the decade frame.

3650d_sm_gold_silver_ratio.gif
 
Third column:
1970 1.635 35.94 21.98
1971 1.394 40.80 29.27
1972 1.976 58.16 29.43
1973 3.137 97.32 31.02
1974 4.391 159.26 36.27
1975 4.085 161.02 39.42
1976 4.347 124.84 28.72
1977 4.706 147.71 31.39
1978 5.930 193.22 32.58
1979 21.793 306.68 14.07 <- 14 bottom in 1980
1980 16.393 612.56 37.37
1981 8.432 460.03 54.56
1982 10.586 375.67 35.49
1983 9.121 424.35 46.52
1984 6.694 360.48 53.85
1985 5.888 317.26 53.88
1986 5.364 367.66 68.54
1987 6.790 446.46 65.75
1988 6.108 436.94 71.54
1989 5.543 381.44 68.81
1990 4.068 383.51 94.27
1991 3.909 362.11 92.63
1992 3.710 343.82 92.67
1993 4.968 359.77 72.42
1994 4.769 384.00 80.52
1995 5.148 384.17 74.63
1996 4.730 387.77 81.98
1997 5.945 330.98 55.67 0.7 -10.48 0.06
1998 5.549 294.24 53.03 -33.5 -11.67 2.87
1999 5.218 278.88 53.45 -97.2 -15.34 6.34
2000 4.9506 279.11 56.38 -60.3 -15.40 3.92
2001 4.3702 271.04 62.02 -63.0 -16.72 3.77
2002 4.5995 309.73 67.34 -59.2 -17.59 3.37
2003 4.8758 363.38 74.53 -88.7 -19.93 4.45
2004 6.6711 409.72 61.42 -61.9 -15.40 4.02
2005 7.3164 444.74 60.79 -65.9 -21.32 3.09
2006 11.5452 603.46 52.27 -78.5 -11.90 6.60
2007 13.3836 695.39 51.96 -42.5 -15.56 2.73
2008 14.9891 871.96 58.17 -30.5 -7.59 4.02
2009 14.6733 972.35 66.27 -15.6 -0.96 16.25
2010 20.1928 1224.53 60.64 -44.2 -2.48 17.82
2011 35.1192 1571.52 44.75 -12.0 14.63 0.45 <- 44.75 bottom in 2011
2012 31.1497 1668.98 53.58 -7.4 17.19 0.31
2013 23.7928 1411.23 59.31 ? 11.86 ?
2014 20.3715 1294.64 63.55 ? ? ?
Average ratio: 55.438
Today: 63.55
Returning to the mean = reason to opt for silver above gold.
Not that I do that swap play, and I also don't see golds price as a reference at all, since mostly controlled by the very same central planning parasites whoms legal theft I try to get 'round.
Just to give a complete, 45 years spanning, story.
One can be right on the 1M timeframe.
One can be right on the 1Y timeframe.
One can be right on the 10Y timeframe.
And still be wrong on the 45Y timeframe.
And any combination! :D
 
Btw finicky, just shows that one has to actually calculate it, instead of taking a rude guess per decade to then throw the rude guesses together for a longer period.
 
True. Since the uses and variables associated with each metal changes greatly by the decade, one could say that the 10 year mean is the more accurate norm.
 
finicky said:
I still think I have a point - briefly and succinctly put, lol
Click to expand...
Well, even your single decade (2004-2014(1/3 year)) average is 61.25, and todays ratio is 66.42 which again points to silver above gold choice.
Not that I care about this price ratio anyway, and your remarks about the scams going round over the silver price / gold ratio, are very true, that's just hype talk to make people willing to pay a free silver ride, in this case to more gold. Sometimes in more whatever except gold/silver, otherwise it would be just a shift and price not affected (not dropped). It's just that your rough estimations were wrong and so conclusions derived from it.
 
BiGs said:
True. Since the uses and variables associated with each metal changes greatly by the decade, one could say that the 10 year mean is the more accurate norm.
Click to expand...
But it wasn't accurate in the first place, let alone to declare it a norm.
And using variables from one timeframe in another, is highly misleading. Just like one would use the march+april2011 gsr trend to say something about the year2011 trend, does the same apply on a decade versus 4 decades. Those that stack silver as a method of saving, vary greatly in time frames. One 5, another 10, yet another 20, even 30, 40 and 'for the kids' haha. Look at what the central planners do, on the multidecade upto even centuries scale. Even back then, somewhere late 18xx, a new century sized fluctuation started, rendering the previous decade useless. Are we; with intrest rates close to zero, with economy maybe have reached a point of inability to do more for the same, at such a point?
And as the figures show, uses and variables associated to the metal itself (I assume you mean industrial etc / noninvestment usage) were a quite small element over the past decade. The price wasnt driven up, and down, due to different industrial etc demand.
 
finicky said:
I still think I have a point - briefly and succinctly put, lol
Click to expand...
The only point I see is that purchases are guided by emotion, not logic or common sense.

That is, what 'should be', logically speaking, does not always occur.

Pirocco's point was much better made, and carried much more truth.

Charts and graphs are very handy to demonstrate whatever it is one wishes to demonstrate.
Interpretation of charts and graphs it where the truth come in. They do not speak truth themselves, only data, to be interpreted.
 
Yeah but we've been hanging around for a decade and the ratio hasn't changed. Why not?
 
finicky said:
Yeah but we've been hanging around for a decade and the ratio hasn't changed. Why not?
Click to expand...
Because central banks and their buddies became big net buyers of gold and so prevented its price trend to appear like a sissy compared to silvers?
Because alot people on the silver market were tricked along bogus stories (alike those you gave) into paying bloated prices and thus drained off less silver?
Just a couple possible answers. Could be a combination of more.
Like it is now, it sits 5 above the decade average, and 8 above the 45 years average (7.8% and 12.5% of currents 64)
This means that at the moment, and on the decade mean, silver is relatively 7.8% cheaper than gold. From what I've read, it's better to buy than sell, when it's cheaper. Not sure tho, needs some further processing.
 
BeHereNow said:
finicky said:
I still think I have a point - briefly and succinctly put, lol
Click to expand...
The only point I see is that purchases are guided by emotion, not logic or common sense.

That is, what 'should be', logically speaking, does not always occur.

Pirocco's point was much better made, and carried much more truth.

Charts and graphs are very handy to demonstrate whatever it is one wishes to demonstrate.
Interpretation of charts and graphs it where the truth come in. They do not speak truth themselves, only data, to be interpreted.
Click to expand...
In the past, I have been criticized several times for showing long lists numbers, and that a chart makes it much easier to interprete. Well, while true if correctly done, I don't do that, exactly because of your last sentence. Instead, I put raw numbers spanning as much years I could find data for. No visual tricks, no selections, no above 0 elevated X axes; no nonlinear scales. Raw numbers, as to calculate oneself, and arrive to their right conclusions.
 
Finding a statistical mean for any length of time will not tell you the real norm, now. It will give you a ball park figure. A ball park figure based on recent economic demand and technology growth would provide a better indication of what the norm is NOW.

I don't even know what Pirocco's point is... ofcourse the more data time frame you have the more accurate the mean is. This is not what I am saying, or what the OP is about, is it?
 
BiGs said:
Finding a statistical mean for any length of time will not tell you the real norm, now. It will give you a ball park figure. A ball park figure based on recent economic demand and technology growth would provide a better indication of what the norm is NOW.
Click to expand...
A mean is never about NOW.
A mean is an average, over a period, in this case a decade.
BiGs said:
I don't even know what Pirocco's point is... ofcourse the more data time frame you have the more accurate the mean is. This is not what I am saying, or what the OP is about, is it?
Click to expand...
The OP was about a decade time frame, right?
The OP wondered about a high gsr, right?
Yet, the gsr sits at the moment 5 under the mean. Yes, of the decade.
And 8 under the 45 years mean.
So this topic would better suit the gold section, since one may wonder about the gold promoting claims that central banks became net buyers:
<year> <average price silver USD> <average price gold USD> <ratio gold/silver> <government net silver purchases Moz> <government net gold purchases Moz> <ratio government silver/gold purchases>
1997 5.945 330.98 55.67 0.7 -10.48 0.06
1998 5.549 294.24 53.03 -33.5 -11.67 2.87
1999 5.218 278.88 53.45 -97.2 -15.34 6.34
2000 4.9506 279.11 56.38 -60.3 -15.40 3.92
2001 4.3702 271.04 62.02 -63.0 -16.72 3.77
2002 4.5995 309.73 67.34 -59.2 -17.59 3.37
2003 4.8758 363.38 74.53 -88.7 -19.93 4.45
2004 6.6711 409.72 61.42 -61.9 -15.40 4.02
2005 7.3164 444.74 60.79 -65.9 -21.32 3.09
2006 11.5452 603.46 52.27 -78.5 -11.90 6.60
2007 13.3836 695.39 51.96 -42.5 -15.56 2.73
2008 14.9891 871.96 58.17 -30.5 -7.59 4.02
2009 14.6733 972.35 66.27 -15.6 -0.96 16.25
2010 20.1928 1224.53 60.64 -44.2 -2.48 17.82
2011 35.1192 1571.52 44.75 -12.0 14.63 0.45
2012 31.1497 1668.98 53.58 -7.4 17.19 0.31
2013 23.7928 1411.23 59.31 ? 11.86 ?
2014 20.3715 1294.64 63.55 ? ? ?
Over the 199x, the gsr mean was 75.
So, quite higher than todays 61.
A high gsr means more money sitting in gold than in silver.
Yet, central banks were net sellers of gold then.
Now, the gsr is 61, alot gold in ETF's (still 2/3 of what was stockpiled since 2003, after last years dump) and the central banks still net buying.

Net Government Gold Sales (positive means it's [SUPPLY], negative means it's [DEMAND])
1997 326
1998 363
1999 477
2000 479
2001 520
2002 547
2003 620
2004 479
2005 663
2006 370
2007 484
2008 236
2009 30
2010 77
2011 -455
2012 -544.1
2013 -368.6

Gold ETFs and similar products
1997 0
1998 0
1999 0
2000 0
2001 0
2002 3
2003 39
2004 133
2005 208
2006 260
2007 253
2008 321
2009 617
2010 367.7
2011 154.0
2012 279.1
2013 -880.8

Look at the figures. Shouldn't we instead wonder why the gsr still sits under the mean?
What can explain this? Rather simple: the silver demand is big enough and/or supply is small enough, to overwhelm the effect central banks and ETF's have on the gold price.
What's the hope for the gold side then? To lure people away from silver to gold. Let's hope it works! :D Otherwise the central banks will again have to come to the rescue, haha.
 
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