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Old 06-08-2012, 03:14 PM   #1
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Gold / Silver Ratio

On "Favorite place to buy PMs", benjamen said:

Quote :
Each month when I go to make a purchase it is narrowed down by 3 things:
1) Which metal do I want to buy
2) What form of that metal (bars, coins, ect)
3) Who can give me the best deal (Local store, online vendor, ect)
Didn't quite know what he meant so I kept reading and saw reference to gold/silver price ratios.

I couldn't find a readily available chart, so I went to Kitco's site to gold and silver spot pricing from June 2002 to today (in quarterly increments first, the more frequently later) and plotted a chart to see the gold/silver ratio. The ratio has swung wildly with gold/ratio being ~80 in December 2008, down to ~40 in March 2011.

So I'm assuming when the ratio is high, buy silver. Ratio is low, buy gold. Is that correct?

PS, In case anyone is interested in plotting their own chart, here's the data...


Date Gold Silver Ratio

2002-06-01 $326.30 $5.01 65.13
2002-09-01 $312.30 $4.43 70.50
2002-12-01 $318.70 $4.42 72.10
2003-03-01 $349.60 $4.59 76.17
2003-06-01 $396.10 $6.70 59.12
2003-09-01 $375.30 $5.10 73.59
2003-12-01 $398.10 $5.33 74.69
2004-03-01 $396.10 $6.70 59.12
2004-06-01 $390.60 $5.78 67.58
2004-09-01 $400.00 $6.54 61.16
2004-12-01 $455.20 $7.99 56.97
2005-03-01 $433.60 $7.34 59.07
2005-06-01 $423.10 $7.49 56.49
2005-09-01 $442.80 $6.97 63.53
2005-12-01 $502.90 $8.55 58.82
2006-03-01 $565.80 $10.18 55.58
2006-06-01 $636.80 $12.10 52.63
2006-09-01 $624.40 $12.92 48.33
2006-12-01 $645.10 $13.97 46.18
2007-03-01 $640.80 $12.82 49.98
2007-06-01 $670.60 $13.69 48.98
2007-09-01 $673.20 $12.02 56.01
2007-12-01 $783.10 $13.98 56.02
2008-03-01 $974.30 $19.81 49.18
2008-06-01 $886.10 $16.87 52.53
2008-09-01 $829.80 $13.59 61.06
2008-12-01 $816.30 $10.26 79.56
2009-03-01 $939.60 $13.11 71.67
2009-06-01 $979.60 $15.79 62.04
2009-09-01 $994.50 $16.22 61.31
2009-12-01 $1,161.30 $18.47 62.87
2010-03-01 $1,116.60 $16.44 67.92
2010-06-01 $1,220.00 $17.41 70.07
2010-09-01 $1,246.60 $19.85 62.80
2010-12-01 $1,414.50 $29.38 48.14
2011-03-01 $1,432.80 $35.67 40.17
2011-06-01 $1,542.40 $36.29 42.50
2011-09-01 $1,884.20 $43.25 43.57
2011-09-15 $1,812.50 $40.66 44.58
2011-10-01 $1,624.80 $29.97 54.21
2011-10-15 $1,679.80 $32.16 52.23
2011-11-01 $1,754.00 $34.13 51.39
2011-11-15 $1,724.80 $32.41 53.22
2011-12-01 $1,745.30 $32.64 53.47
2011-12-15 $1,599.20 $29.74 53.77
2012-01-01 $1,566.40 $28.54 54.88
2012-01-15 $1,639.70 $29.77 55.08
2012-02-01 $1,725.90 $33.67 51.26
2012-02-15 $1,723.80 $33.28 51.80
2012-03-01 $1,711.00 $34.73 49.27
2012-03-15 $1,657.30 $32.54 50.93
2012-04-01 $1,677.00 $32.99 50.83
2012-04-15 $1,652.90 $31.52 52.44
2012-05-01 $1,653.70 $30.65 53.95
2012-05-15 $1,544.30 $27.72 55.71
2012-06-01 $1,625.90 $28.56 56.93
2012-06-08 $1,595.27 $28.64 55.70

Last edited by superhero; 06-08-2012 at 05:04 PM. Reason: Formatting
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Old 06-08-2012, 04:33 PM   #2
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Nice info SH. You are correct with the high low ratio assumption.
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Old 06-08-2012, 06:19 PM   #3
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http://www.pmbug.com/forum/f13/how-s...buy-sell-703/?

The above is an old thread about how I personally look at ratios.
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Old 06-09-2012, 02:13 AM   #4
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As long as there is blatant manipulation of the PM market, I'm not sure if the G/S ratio is all that significant.
It is not a 'natural' ratio at all. That means it has been rigged to be as it stands.
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Old 06-18-2012, 08:34 AM   #5
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Article on the subject of gold/silver and gold/platinum ratios:
http://seekingalpha.com/article/6586...le-or-are-they

His strategy:
"Platinum
Hoard when 0.7 - 0.8 oz. gold buys 1 oz. platinum
Accumulate when 0.8 - 0.9 oz. gold buys 1 oz. platinum
Hold when 0.9 - 1.4 oz. gold buys 1 oz. platinum
Swap when 1.5 - 1.75 oz. gold buys 1 oz. platinum
Liquidate when 1.75+ oz. gold buys 1 oz. platinum

Silver
Hoard when 63+ oz. silver buys 1 oz. gold
Accumulate when 57 - 62 oz. silver buys 1 oz. gold
Hold when 34 - 56 oz. silver buys 1 oz. gold
Swap when 20 - 33 oz. silver buys 1 oz. gold
Liquidate when 19 or less oz. silver buys 1 oz. gold"
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Old 06-19-2012, 08:33 PM   #6
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The GSr is above 57 now. Is it time to accumulate?
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Old 06-19-2012, 08:48 PM   #7
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Originally Posted by superhero View Post:
The GSr is above 57 now. Is it time to accumulate?
That s how I took it
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Old 06-20-2012, 09:35 AM   #8
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Originally Posted by superhero View Post:
The GSr is above 57 now. Is it time to accumulate?
Silver appear cheap to me (compared to gold).
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Old 07-28-2012, 09:12 PM   #9
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The GSr was at 58.4 Friday afternoon.

I'm ready to accumulate more PMs, and am hesitant on buying any gold because it's so expensive compared to silver.

OTOH, an oz of gold is easier to carry / hide compared to 58 oz of silver (though 58 oz of silver is way more satisfying to look at or play with).

For those who buy both gold and silver. Are you buying gold lately? Or sticking with silver for now?
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Old 07-28-2012, 09:52 PM   #10
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Originally Posted by superhero View Post:
The GSr was at 58.4 Friday afternoon.

I'm ready to accumulate more PMs, and am hesitant on buying any gold because it's so expensive compared to silver.

OTOH, an oz of gold is easier to carry / hide compared to 58 oz of silver (though 58 oz of silver is way more satisfying to look at or play with).

For those who buy both gold and silver. Are you buying gold lately? Or sticking with silver for now?
Having just completed a goal for silver, I am leaning towards Platinum at the moment. Like gold, it is much easier to move that silver, but right now the ratio to gold is way out of the normal range.
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Old 08-21-2012, 09:41 AM   #11
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Silver appears to be making some moves relative to gold. GSR was down to 56 earlier this morning.

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Old 08-23-2012, 09:08 AM   #12
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Ratio is roughly 54 and a half this morning. Silver still moving...
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Old 08-27-2012, 01:48 PM   #13
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Under 54 today...
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Old 09-04-2012, 07:58 AM   #14
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Under 53 today ...
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Old 09-07-2012, 09:31 AM   #15
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Under 52 today ...
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Old 11-25-2012, 10:13 AM   #16
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GSR is right at 51.33 this morning. Finally got back to where it was almost 3 months ago.
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Old 01-04-2013, 11:10 AM   #17
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Looks like we might have a head and shoulders formation here with early 2012 beeing the left shoulder, summer 2012 the head and right now the right shoulder.

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Old 04-19-2013, 07:11 PM   #18
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The GSR is at a key point arround 60. Either silver gets something going in terms of outperformance against gold or we're at 65 in a hurry. Short terms silver is oversold relative to gold. It seems like the weak copper market is holding silver down. If we get an intense slowdown in the economy, this trend is going to continue. So what I'm saying is: Beware silver bulls. There might be more trouble ahead, even with silver trading below production costs.

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Old 04-20-2013, 08:31 AM   #19
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That may be so for the paper market, but a "physical GSR" looks a bit different right now. Premiums on physical silver are running 20-30% while premiums on gold have stayed steady.
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Old 04-20-2013, 08:43 AM   #20
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Yes that's a very good point. We need to watch that, too.
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