Gold Silver Ratio is one of the main indicators to determine the value of gold and silver. Gold Silver Ratio basically means how many oz of silver it takes to exchange for on oz of gold. The calculation can be done by dividing gold price with silver price. For example, if gold price is $30 and silver price is $3, the calculation will be 30 / 3 = 10. The Gold Silver ratio will be 10.
Right now, gold price is $1598.40 and silver price is $27.44. That would make Gold Silver Ratio as 58.25.
Gold Silver Ratio mainly fluctuate between 50 to 55 for the past 6 months. Recently Gold Silver Ratio hit 59 and is obviously approaching 60. It is time to give a more serious thought into Gold Silver Ratio when we invest in silver. This is how Gold Silver Ratio looks for the past 6 months.
Looking at the 6 months chart, Gold Silver Ratio is on the uptrend.
In fact, if we look at the following 1 year Gold Silver Ratio chart, it has broken the 2 major resistances at 54 and 58 respectively. Which further proves the point that Gold Silver Ratio is on uptrend.
Okay, it’s on uptrend, but so what? What does it mean to investors?
If you plan to exchange your gold for silver right now, think again. Reason is simply because Gold Silver Ratio is on uptrend. 1 oz of gold might change you 58 oz of silver now. If you are willing to hold on a little longer, 1 oz of gold might change you 68 oz of silver in the next 6 months.
Gold Silver Ratio can only go up base on the following 2 variables:
- Gold price goes up faster than silver
- Silver price drops faster than gold
$26 is a very strong support for silver price. Recently, the market has been testing it several times and luckily it has not been broken. Once it is broken, the next support we are looking at is $18. In the Malaysia Silver Investor Membership Site I did talk about how we should invest accordingly base on the price changes:
In the eBook Practical Guide For Investing Silver In Malaysia, it discusses the exit strategy using Gold Silver Ratio. In the membership site, I do give frequent updates and I would personally answer ALL questions being asked. This is the best education for silver investment in Malaysia. When comes to investment, the best advice I have personally received is “If you think education is expensive, try ignorance“.
Until next time, good luck with your silver investment and I will update you more in the membership site.