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jsharpe2030

Considering current spot ratio, when should a Silver Stacker start to add Gold?

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Bottom Line Up Front: Considering the current Gold to Silver spot ratio, when should a Silver Stacker start to add Gold to a fledgling stack?

Background: I am new to the game. I decided to start buying PM in Feb 2019. I quickly accumulated 200 oz Silver mixed between ASE, Generic Rounds, and 1 each of the Queen's Beast 2 oz. My purpose for buying PM is as a long term investment and hedge against a currency killing event. I have no intent to for profit in the short term or "needing" this money in a current paradigm crisis. 

Discussion: I want to continue adding Silver to the stack, but I'm also attracted to Gold. However, Silver just seems so cheap right now that I feel like all my cash set aside for PM investing should continue to be directed towards Silver rather than Gold. Each time I look at buying a 1oz Gold Eagle I cant help comparing it to all the Silver I could buy. That's why I'm asking you veterans for your wise opinion. When do you think its appropriate to start adding some Gold to the stack? Is it based on Silver to Gold spot ratio or is it an ounce to ounce ratio of your personal stack? Of course this all boils down to personal choice, but I'd still appreciate hearing from those with more experience than myself.  

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If your strategy is a purely simple gold silver ratio play, continue to accumulate silver. As the ratio has been one of the highest in record, that being said, does not mean the ratio does not keep on going higher. 

The G/S ratio is only a guide on which PM is in favour base on price. 

The proportional PM allocation depends on individual risk appetite. If linearly Gold rise 3 times while Silver rise 4 times as much in a bullish trend. Allocation of physical gold versus silver should be 4:3. Risk is balance between the PMs. That being said, the world is what you want it to be. 

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The whole gold/silver ratio argument seems to me like a chicken bone in the technical analysis's voodoo bag. Yes, there is a ratio of how much of each metal comes out of the ground, but there are huge variables. Silver is often mined as a byproduct of other metal mining, its a industrial metal, and it's generally not used as a means to transfer meaningful wealth from government-to-government in modern times. 

There is no gold/silver ratio that makes sense. Rather, silver is it's own product, a commodity that has costs of production and market value. 

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There's an conventional theory the gold-silver ratio tells us silver must be undervalued.  There's an inconvenient alternative that gold could be overvalued.  Or a combination, which could see gold fall back some and silver rise?  While long term i have confidence in both, short term im wary of gold at this point, focus on collectables. 

Edited by Martlet

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Technical analysis is no voodoo bag. The price is like a car on the move. Technical analysis is like the tachometer of the car. It provides the current momentum, speed, horsepower of the car. It does not tell what direction the driver intents to go, nor the time it will reach its destination. It is possible for one to have a near-term foresight of the car’s movement if one master such skills. Long-term foresight is like having man set foot on the moon. One who knows the driver, has the information of the driver’s destination would hit homerun than those many without.

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When I started stacking silver I also added some gold.
Life was great as prices kept on rising but then silver took off.
Everyone on forums, the "experts", indeed just about everyone piled into silver, myself included, then it crashed.
I am sitting on a pile of silver valued way below 50% of its cost.
Silver today is cheap compared to gold - but why ???
Even platinum which was once more valuable than gold took a hit.
It is too easy to fit stuff like the drop in industrial consumption due to declining use of catalytic converters but then platinum is the best metal in hydrogen fuel cells etc..

I believe the PM markets are heavily manipulated by the smug banks and other 'sheisters' using paper swaps or whatever they call them nowadays, and there is no way the gold /silver ratio or gold / platinum ratios should be as they are today.
Since gold is unlikely to rocket in price then that only means silver is a definite buy / accumulate whilst it remains cheap by comparison.

QED

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When you run out of room to add any more silver. There is only one play for the GS ratio and that's swapping out your silver for gold when the ratio hits somewhere in the neighborhood of 30:1 and then swapping back to silver when the ratio rises again. It can be lucrative but timing is important. It has only been playable a handful of times in the past.

Edited by STONE

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8 hours ago, Au79 said:

 It is possible for one to have a near-term foresight of the car’s movement if one master such skills. 

May as well read chicken bones with a splash of raven's blood on them. If technical could give you even nanoseconds of "foresight," the algorithms would be making money hands over fist. Banks here in the states pay huge money to have their serves right next to the exchanges to shave nanoseconds off trades, have experimented with automated buy/sell programs. They found there was more money in being a middle man between 3rd party transactions - specifically because there is no technical measure that can give "foresight."   

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Buy Gold when you can afford it. Till then keep buying the silver. I can buy a Silver eagle for under $20.00 USD and my wife is ok with it. I buy an ounce of Gold and our budget is blown to Hell. 

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5 hours ago, STONE said:

When you run out of room to add any more silver. There is only one play for the GS ratio and that's swapping out your silver for gold when the ratio hits somewhere in the neighborhood of 30:1 and then swapping back to silver when the ratio rises again. It can be lucrative but timing is important. It has only been playable a handful of times in the past.

I did this back in 2011/12 when It was 1:27 (not spot but what I was buying and selling for) good times :)

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11 hours ago, Au79 said:

Ecclesiastes 3:1-8🌞

8b: "a time to buy gold, and a time to buy silver."

Since everyone else is giving an opinion, I don't want to feel left out.  My basic purpose for stacking is to change paper wealth into PMs, for reasons we've all been over again and again; and to have a viable currency option should the day come when paper/fiat/cashless is no longer a thing.

With that as my focus, silver is primarily to have an every-day currency, hence my focus on fractional silver.

Gold is meant for those larger expenses, when carrying a pocket full of silver is inconvenient, and a gold coin or two might be more suitable.

That being said, I don't have a set silver/gold ratio in mind.  It's basically that I'll buy a few rolls of silver, then I'll buy a gold coin, just to kind of mix it up a little and not lose sight of having a decent amount of both.  Maybe it's a 4:1 ratio...four rolls of silver, and then one gold coin?  Yeah, kinda, I guess.

We DON'T KNOW that silver will head for the moon, and that gold won't.  Or vice-versa. Or both.  Or neither.

EDIT: in other words, just be sure you're buying both, whatever your own ratio might be.

Edited by RacerCool

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12 hours ago, Au79 said:

https://goldsilver.com/blog/the-best-time-to-buy-gold-and-silver-in-2018-is/

if the above article is well documented. Then at each Christmas, you would be buying at the highs of the year. Do your own homework if seasonality buying works for you (since it is a single purchase per year) and enjoy the savings.

 

I guess it was bad timing for those that bought in dec 2015?

 

HH

Edited by HawkHybrid

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Perhaps it sounds common sense for a Dec buy only strategy. If precious metal during nov monthly close with a bullish candle for the year, one will likely buy high in Dec for that year. If precious metal during nov monthly close with a bearish candle for that year, one will likely buy low in Dec for that year. Sideways candle at end of nov monthly close is self explanatory.

Thanks to HH trigger on this reply 🤩

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