Gold to silver ratio. Thoughts, opinions and help welcome.

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jackmeoff
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Gold to silver ratio. Thoughts, opinions and help welcome.

Just wanting to get people thought on the gold to silver ratio. I buy mostly silver but am looking to switch some up at the right rate. What are your opinions on where you see it heading in the next 4-6 months. I am not one that sees it heading back to 16:1 and think the most it will ever get to is 25:1 but that is just my opinion. This is what I have been looking at and am hoping for 30:1 but am at a loss as we have been around 45:1 for a while. 

Edited by admin on 11/08/2014 - 06:08
Dr Durden
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I'm with you. 16:1 is a pipe

I'm with you. 16:1 is a pipe dream and 10:1 is irrational exhuberance...at least in the short term. In 10-15 years, maybe. Look at the chart and extend the green lines down and estimate the time.

Looks like the MA since the new bull began in 2003 or so has been about 50, right? So it looks at 45 we're on the low side historically...but then also trending lower. 

For some reason I've had "30" in my head as the point to trade some silver for gold. That's roughly $2250/$75 or about another 5 years. Hey man, I've got lots of phizz and plenty of time.

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margaritatime
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32

I think you will see 32:1 - but a number of things will occur prior to that. A sort of bullet list I keep in mind;

1. The GSR will increase in a recessionary environment, which I believe will happen prior to the GSR decreasing. 

2. There will be heavy volumes of buying gold if a macro on the markets happens, the predecessor of which will be a liquidity crisis - the early warning signs.

3. The GSR has room to move first to 50, then to 60.

4. A lower GSR of course means more expensive silver - it has room to go 32, possibly lower. In this situation, gold will more less remain in a horizontal channel [when it reaches it's highs parable GSR] while silver catches up.

* A foot note to this [my own strategy, others may concur or not] - I try to keep a ratio of 40:1 on hand [2011]. I trade anything above 50, and anything below 40. When I see a spike in the GSR one direction or the other I sometimes break those rules, it all depends at what price I got in to that particular round of metal at.

WheelerSilver
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History

I have heard that 15:1 gold to silver has been a steady historical ratio. I'm not sure how accurate that is or how far back that ratio stretches. In the modern Fiat world, 15:1 seems absurdly low. 44:1 even seems low. I would love to see 15:1 though for obvious reasons :)

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jackmeoff
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@Dr Durden

It looks like it is testing the channel now at the 45-46 mark. If it can hold we could see it come back down  and the bottom at 28 . So far it has been holding very well but that 50 mark looks to be solid for the up times and down times since the 80's.

I can see your target of 2250/75 but the 5 year seems too generous. I could see it by sometime next year if things in here and in Europe don,t get any better. The only thing that has me thinking right now is deflation prior to some sort of high inflation.

I am looking to get out of some silver starting the 35 and down to 30 if and when it gets there.

llaettner
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daily AND weekly upper BB tested on ratio

Weekly moving average is at 42.9, and current value already stated, is 44.84, with Weekly StochRSI at 100, ratio is "overbought".  I don't have an opinion on what the value should be, who knows :)  I like to try to predict its next movement based on its previous one. . .

bern
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IIRC, the ratio was down to

IIRC, the ratio was down to around 33:1 back in May before the CME margin hikes.  Not sure if that is really meaningful or not in terms of EE pain thresholds, but one take away I get from it is that ratios above 40:1 are definitely too gold heavy.  $.02

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Brotha Bob
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My thoughts

My thoughts are the May GSR was a foreshadowing of things to come. I would look at 25:1 or lower.

There are many who have predicted a much lower GSR. Some of the historical ratios were government pegs, so I don't put a lot of stock in the 15-16:1 numbers. Other have talked about a 1:1 ratio someday.

Silver was slammed in May and the margins are keeping it down, for now. Given that, at some point (and who really knows when) the ratio will drop as silver finds a truer value. With the shackles on silver (hat tip to Harvey Organ) the GSR ratio has increased from May. The smart move is in silver, I think the potiential appreciation is much greater,and a smaller GSR.

For trading, I would start swapping silver for gold at 30, or lower. But, still look to 25 or less someday. Maybe even sooner then anyone thinks.

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SilverBoy
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I'm sure we will see Gold/Silver ratio 16:1

I'm sure we will see Gold/Silver ratio 16:1 maybe even 10:1. When PM bullmarket will get in bubble silver to gold ratio will skyrocket. Street people will prefer silver because it will be cheapier and all those financial advisors will tell that silver market is smaller than gold and silver is used in industry so it have greater potential than gold.

WheelerSilver
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Mike Maloney

Mike Maloney and Robert Kiosaki say that 16:1 is immanent,

They aren't exactly unbiased opinions though.

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