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Gold to silver ratio.


RoughDog

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With the gold to silver ratio being so high, I have been monitoring the trade section.

It seems like no one wants to trade gold for lots of silver.  Curious?

What chances do you think there will be of trading silver for gold if the ratio closes?

On the surface doesn't appear likely.

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3 minutes ago, RoughDog said:

With the gold to silver ratio being so high, I have been monitoring the trade section.

It seems like no one wants to trade gold for lots of silver.  Curious?

What chances do you think there will be of trading silver for gold if the ratio closes?

On the surface doesn't appear likely.

The problem is the trading ratio. I'm sure people would happily trade at the GSR of approx 80:1 but not at the typical purchase ratio.

Profile picture with thanks to Carl Vernon

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4 minutes ago, RoughDog said:

What chances do you think there will be of trading silver for gold if the ratio closes?

 

why would you want to trade silver for gold if the ratio

closes? (a low ratio usually means that both metals

are above average in price)

 

HH

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Interesting, i was thinking similar recently.

I wonder what would be the true gold / silver ratio in a TSF trade situation. What would say 1 oz gold britannia get you in silver terms (say 1 oz coins) to keep in simple and vice versa how many 1 oz coins would get you a 1 oz gold brit on here - a more realistic gold/silver ratio!

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23 minutes ago, HawkHybrid said:

 

why would you want to trade silver for gold if the ratio

closes? (a low ratio usually means that both metals

are above average in price)

 

HH

What I was trying to say is that the spot price ratio is currently: 1 oz of gold = 82 ozs of silver.

No one appears to be trading their gold.

So it appears that people holding gold don't want to trade it for lots of silver.  

 

If the ratio closes to 1 oz of gold = 40 ozs of silver. 

The scenario that many silver stackers talk about.  They say they will trade it for gold.

Who is going to trade their gold?

 

It seems like I would have to sell silver to buy gold and not trade it.

 

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22 minutes ago, h103efa said:

Interesting, i was thinking similar recently.

I wonder what would be the true gold / silver ratio in a TSF trade situation. What would say 1 oz gold britannia get you in silver terms (say 1 oz coins) to keep in simple and vice versa how many 1 oz coins would get you a 1 oz gold brit on here - a more realistic gold/silver ratio!

This is very easy to determine.
A lot of gold sold on the forum tends to be sold at around 3% - 5% over spot, much more if fractional.
Say spot right now is £925 a forum seller might list for sale a one ounce bullion coin for £955 plus P&P
Typically you can buy a one ounce silver coin from the forum for less than £15 so let's call it £15 plus P&P
That makes the Forum Au/Ag ratio = 63.7.
The reason for this lower ratio is due to the margin built-in to silver.

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What does it even mean to "trade silver for gold" is a question worth asking.

As others have mentioned, trading directly bypasses a dealer's spread.

That said, you get the same effect by selling and then buying, so in that sense you could trade anytime you want to just by being willing to cover the dealer's spread.

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1 hour ago, RoughDog said:

So it appears that people holding gold don't want to trade it for lots of silver.  

Correct.

 

1 hour ago, RoughDog said:

Who is going to trade their gold?

Not me 😊

Technically, alcohol is a solution..

'It [socialism] poses a growing threat, however unintentional, to the freedom of this country, for there is no freedom where the State totally controls the economy. Personal freedom and economic freedom are indivisible. You can’t have one without the other. You can’t lose one without losing the other.'

"There is no such thing as public money, there is only taxpayers' money"

Let not England forget her precedence of teaching nations how to live.

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41 minutes ago, Lowlow said:

What does it even mean to "trade silver for gold" is a question worth asking.

As others have mentioned, trading directly bypasses a dealer's spread.

That said, you get the same effect by selling and then buying, so in that sense you could trade anytime you want to just by being willing to cover the dealer's spread.

Something similar to this.  This is gold for gold.

 

 

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I would trade at the ratio that corresponds to the prices I could sell both metals for at any given moment in time. I said 82:1 which is the current spot GSR but real life selling prices might mean a higher ratio, I haven't checked.

Profile picture with thanks to Carl Vernon

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51 minutes ago, sovereignsteve said:

I would happily trade gold for silver at 82:1

So you can buy silver for about £15 an ounce on here.  82x15 = £1,230 x 1.05 for 5% premium = £1,291.50 

So if gold spot price jumps to £1,230 next month and gold coins are selling for £1,291.50 and silver coins sell for £15 you would like to trade your gold for silver?

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What I am asking is that if the silver price remains the same but gold spot price increases giving a real trade ratio of 82:1 you would trade your gold for silver?

1 ounce of gold for 82 ounces of silver

If silver ounce is £15 and gold ounce is £1,230 (real coin prices, not spot price)

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2 minutes ago, RoughDog said:

What I am asking is that if the silver price remains the same but gold spot price increases giving a real trade ratio of 82:1 you would trade your gold for silver?

Current selling ratio is 82 , you can get spot price for gold and silver from various dealers depending on the coins. What you can sell silver for on the forum is irrelevant. If I want to liquidate I will need to do so there and then, I could not depend on this forum.

If silver spot remains the same and gold increases then then this ratio would rise and would then become my trading (swapping)  ratio.

Profile picture with thanks to Carl Vernon

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Current selling ratio differs depending where you are selling.   You can't buy silver at spot price.  I was talking about trading.  This forum has the ability to trade gold for silver and silver for gold.  The prices here are more real world than the dealers.  Trading an ounce of gold for 82 ounces at a dealer might be equivalent to an ounce of gold for 100+ ounces of silver here.

It doesn't matter you answered my question anyway.  That is, there is a real ratio that you would part with your gold for silver.

 

 

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One of the things I learned from Mike Maloney's book was the use of the gold-silver ratio to inform the decision on what ratios to accumulate the metals in.  Silver at the moment is "cheap" compared to gold, based on the historical ratio, so it makes sense to put more money into silver than into gold.  You could also potentially grow the value of your stack by flipping between gold and silver and back again based on the ratio, but that is not something I have considered doing yet.

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it doesn't surprise me in the least that nobody wants to trade their gold for silver. Silver is in the doldrums and out of favour, and this holds true for metal stackers as much as for the lay person. Most "stackers" are just as emotionally driven and suspectible to following the herd and chasing what is most in favour just like most stock investors chase the momentum stocks and ignore the unloved value plays. No, most gold buyers will only start considering silver when the GSR drops below 50 or 60 as they will have seen the outperformance and want a piece of the action.

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4 hours ago, RoughDog said:

Current selling ratio differs depending where you are selling.   You can't buy silver at spot price.  I was talking about trading.  This forum has the ability to trade gold for silver and silver for gold.  The prices here are more real world than the dealers.  Trading an ounce of gold for 82 ounces at a dealer might be equivalent to an ounce of gold for 100+ ounces of silver here.

It doesn't matter you answered my question anyway.  That is, there is a real ratio that you would part with your gold for silver.

 

 

Sorry, I didn't realise you were only referring to trading on the forum at normal selling prices based on the odd coin or two.

There may well be silver stackers who would consider this but if there are wanting to buy a decent quantity of silver, it can usually be had cheaper at the poplular dealers.

The ratio I mentioned might well come down depending on the silver coins offered.

Profile picture with thanks to Carl Vernon

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1 hour ago, SouthCoastInvestor said:

One of the things I learned from Mike Maloney's book was the use of the gold-silver ratio to inform the decision on what ratios to accumulate the metals in.  Silver at the moment is "cheap" compared to gold, based on the historical ratio, so it makes sense to put more money into silver than into gold.  You could also potentially grow the value of your stack by flipping between gold and silver and back again based on the ratio, but that is not something I have considered doing yet.

We've had this discussion before on this forum. All I'll say is past performance is no indication or guarantee of the future.

Profile picture with thanks to Carl Vernon

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8 hours ago, RoughDog said:

So it appears that people holding gold don't want to trade it for lots of silver.

 

people hold gold for very different reasons to that of

holding silver. there's no equivalence of a sovereign in

silver. why should I trade sovereign in for silver if in 10,

20, or maybe 40 years time the markets might peak and

the silver has increased twice the percentage of gold.

during that 10+ years, silver makes a lousy insurance hold.

there's gambling money and insurance money. gambling

money can all be exchanged for insurance money, but

it doesn't work the other way round. only the crazy, stupid

or ignorant will convert all of their insurance money into

gambling money.

it's like giving babies whisky when it's cheap versus milk

and giving grandpa milk when it's cheap versus whisky.

both will not be impressed by the penny pinching.

 

HH

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9 hours ago, Pete said:

This is very easy to determine.
A lot of gold sold on the forum tends to be sold at around 3% - 5% over spot, much more if fractional.
Say spot right now is £925 a forum seller might list for sale a one ounce bullion coin for £955 plus P&P
Typically you can buy a one ounce silver coin from the forum for less than £15 so let's call it £15 plus P&P
That makes the Forum Au/Ag ratio = 63.7.
The reason for this lower ratio is due to the margin built-in to silver.

But since you'd effectively sell back that margin when looking to swap for gold if GSR drops to say, 50:1, wouldn't you still keep the benefits of the 82:1 ratio you had before? At 50:1, silver would be £18.50 if gold was still at £925. Now you can sell your silver on this forum at £18.5 spot + margin to make roughly £23/ounce. Let's say you sold 82 ounces (the old [current] GSR), that is £1,886. Now you can buy gold at £955 with some extra money on top.

The only ways I'd see that scenario going bad is if it is gold that drops in price to £575 while silver remains at £11.5 making a 50:1 GSR, which could happen but would be unlikely as far as I can predict anything. The other way being if industry margins on gold and silver change drastically, which also isn't too likely.

I hope my maths is right, I have the IQ of a Tarkalian field mouse.

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4 hours ago, HawkHybrid said:

 

people hold gold for very different reasons to that of

holding silver. there's no equivalence of a sovereign in

silver. why should I trade sovereign in for silver if in 10,

20, or maybe 40 years time the markets might peak and

the silver has increased twice the percentage of gold.

during that 10+ years, silver makes a lousy insurance hold.

there's gambling money and insurance money. gambling

money can all be exchanged for insurance money, but

it doesn't work the other way round. only the crazy, stupid

or ignorant will convert all of their insurance money into

gambling money.

it's like giving babies whisky when it's cheap versus milk

and giving grandpa milk when it's cheap versus whisky.

both will not be impressed by the penny pinching.

 

HH

You make some very interesting comments.  I would like to know the very different reasons people hold gold vs silver?

When I watch videos and read post people seem to mention the same reasons.  I am fairly new to this and uneducated.

You say there is no equivilant to a sovereign.  Are you refering to the image on the coin or are you referring to low gold premium for it's weight

Obviously there is a gold and silver britannia but no silver sovereign.

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