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Do I understand the GSR ?
1630Boston
Posts: 13,772 ✭✭✭✭✭
I understand the Gold/Silver Ratio dollar wise $1200/$14 = 85.7
But how does this dictate how much of each metal you own ?
Just trying to learn what others do 
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
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It tells you which of the two metals is currently "cheap" compared to the other
A high ratio says that silver is the better buy. Throughout the twentieth century, the gold-to-silver ratio has averaged about 47-50.
Give Me Liberty or Give Me Debt
I’ve heard said that when the ratio is over 80 but silver or under 60 buy gold. Or is that backwards, heck I don’t know! Haha. To me the ratio is like the number history marker on roulette table. Really does not indicate, dictate much. An interesting dats point, but I don’t think it offers much clairvoyance enough to predict the future.
I did use it in a deal once to figure out how much silver I needed to trade for a gold piece, so that’s helpful. I guess if it took 85.7 Oz of silver I paid 35 dollars for (2999.5) to a buy an oz of gold that’s currently 1200 with historic high at 1900, I prob wouldn’t do it. 1200 divided by 85.7 is 14.00, so if I had silver sitting around I had purchased at that or below I wouldn’t hesitate to swap. So I could track the ratio at a glance and see when the math made since to do such a trade.
"Past Performance Is No Guarantee of Future Results"
100 years of ratios
https://www.macrotrends.net/1441/gold-to-silver-ratio
I like the ratio, but I don't like the space silver takes up.
Swapping some gold to silver at the moment myself. Just not sure where Im gonna put it all.
Thanks for your thoughts everyone
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
Everything prior to the early 1970's should be disregarded don't you think?
The correct answer is"What is nonsense Alex"
If I understood the GSR, palladium just threw a wrench in the spokes.
What ever happened to all that talk of a 16:1 ratio from nearly a decade ago?
Knowledge is the enemy of fear
+1
Buy low, sell high.....
Cheers, RickO
What ever happened to all that talk of a 16:1 ratio from nearly a decade ago?
That talk was from about 4 decades ago when the market was still trying to equilibrate from having gold & silver de-monetized. In spite of the large inventory overhang from the strategic stockpile that the US Govt was to liquidate, the ratio did reach 16:1 during the 1980 spike.
Since that stockpile is now gone, one would assume that the ratio depends on supply & demand (minus the effects of manipulation) of the two metals. That's about 6 variables - 4 variables too many to know what's causing changes in the ratio.
The real choice is between assets for which there are too many variables vs. assets that depend on expansion of the debt bubble and the questionable integrity of 3rd party management which is generally sequestered in offices far away from your own location. Either way, you take your chances.
I knew it would happen.
But is sure is a dang good indicator.
Give Me Liberty or Give Me Debt
Alex, I'll take "what is a dang good indicator" for $22.
Give Me Liberty or Give Me Debt
The GSR doesn't tell you when to buy: it tells you what to buy.
GSR predicting War!
Could you really get 100:1 with the premiums involved? The spot price may have said 100:1 but did anyone trade one once of gold for 100 silver eagles?
He who knows he has enough is rich.
Alex, I'll take unicorns for all the cheddar.
The whole worlds off its rocker, buy Gold™.
When it is extremely out of whack, such as the recent 120:1, it is screaming "start accumulating."
Give Me Liberty or Give Me Debt
Derry
Hopefully a person has BEEN accumulating as a way to diversify. At 120 it told me that at that number, I did not need any more generic gold for a while. The saving grace for me is that GSR stalled between 70-90 for a long time. Maybe 6+ months iirc. Allowed me to buy AG for longer than normal.
But I can remember some pretty sharp people here just thrashing silver as the GSR climbed. Saying things like-"you'll regret it" & "you'll have a hard time getting out of it".
Fortunately, I've seen this play before. Lol.
120:1 told me to add to the accumulation.
Give Me Liberty or Give Me Debt
Indeed. Good that some waited and werent bothered or consumed by doom and gloom and conspiracy and manipulation.
Just gotta understand relative valuations. Somebody here kept saying that.
Knowledge is the enemy of fear
Just stack equal ounces of each.
I thought you were talking about "G"un "S"hot "R"esidue.
Whatever happened to all that talk of $1800 gold from less than a decade ago?
Give Me Liberty or Give Me Debt
Events and prices drive the ratio,
Not the other way around: the GSR is an effect, not a cause, of events.
Liberty: Parent of Science & Industry
Fixed it for ya.
Knowledge is the enemy of fear
Why Gold and Silver prices are risiing.
Gold: ". . . ongoing financial crisis, negative US Treasury yields, explosive quantitative easing (QE) by central banks, fiat currency debasement, zero to negative official interest rates, government Covid-related spending out of thin air, ballooning global debt, the risk of a US dollar crisis, and the growing risks of hyperinflation."
Silver: In addition to the triggers for gold, ". . . stronger industrial demand as economies reopen, silver mine supply disruptions, strong physical bar and coin demand, ETF silver demand."
And for the biggest price trigger that has been discussed here repeatedly (and laughed off by the local deniers): "It’s also important to stress that there is still an ongoing financial crisis, because nothing in the financial system has been resolved, merely postponed, and in fact has even been made worse by QE and the creation of more debt."
Give Me Liberty or Give Me Debt
I thought it was because JPM was forced to sell and stop manipulating.
We all agree that its because of a massive injection of global QE.
Knowledge is the enemy of fear
What we don't all agree is the notion that any of this necessarily causes gold and especially silver to rise in price vastly and disproportionately more than stocks, real estate, collector cars, whiskey, or fresh loaves of crusty sourdough bread.
Liberty: Parent of Science & Industry
What manipulation? LOL
Give Me Liberty or Give Me Debt
Historically PMs have proven to underperform other asset classes, sometimes for decades and massively.
But it sure is fun to blame others. Lol
Knowledge is the enemy of fear
Lets compare it to your preferred asset:
it depends largely on the time frame you choose
"Which is why the real winner is neither Stock Bulls nor Gold Bugs. It is the investor who can actually remain invested through tough times in a single asset class by maintaining a diversified portfolio of multiple assets: stocks, bonds, real estate, commodities, and alternative investments."
"Overall, since 1972, the S&P 500 has had a higher return (only 10.6% vs. 7.4% for gold) with lower annualized volatility (15.0% vs. 19.8% for gold)."
So the real winner is one who diversified at the right times and traded the volatility of gold at the right times. I'm satisfied with my trades, how about you?
Give Me Liberty or Give Me Debt
I'm satisfied with my trades, how about you?
Im sure moreso than you. Afterall i stayed away from a stagnant non-income producing asset that has had zero to negative return over the last decade in preference for one that generated income and returned 300% or more.
Knowledge is the enemy of fear
Yes. With a forum member not long ago. He did well trading his gold eagle for a hundred silver eagles, even though the ratio was 118:1. I could not give up more. Be happy to trade with GSR at 80to 1, but in all practicality the extra roll of eagles was to his advantage (imo).
I grew up in San Jose, a town where buying and selling houses has been a second career for a lot of people since WW2. A lot of people have made a lot of money doing it. A lot of those that pursued Real Estate in the Bay Area think they are a genius in RE ventures.
Same with other asset traders. We're all geniuses until we're not.
I can also give you the names of a lot of people who bought assets at the wrong time. Stocks, bonds, metals, RE, companies.
But this is a coin metal forum not a stock exchange forum.
PMs have been stagnant only to those with a buy and hold mentality. Their volatility has provided excellent returns to those that buy low and sell high. I have built a very large stack that is funded primarily from such profits. Sorry to hear you chose not to participate in this great money making opportunity. If you would come to this forum to learn something about PMs instead of spewing your non PM dribble you could have actually made money with PMs.
I own equities, lots of them. Because I have limited my discussion on a PM forum to PMs, you, as usual, assume things you know nothing about. While my PM holdings are only about a third of my overall portfolio, I enjoy trading and stacking them almost as much as I enjoy the BS you spew in trying to turn a PM forum into a stock forum. You'll never get it: PMs are insurance, not an investment.
Give Me Liberty or Give Me Debt
You are just so contradictory its hilarious. Yes it is fun.
Are PMs for stacking or trading? Because you just said both.
Are PMs insurance or for making money? Because youve just said both.
Lets you forget 15 years ago when you continuously disparaged equities. Whats fair for the goose, right?
You think you are the ruler of this forum and tout misinformation, conspiracy theories and fake news. Sounds like someone running for president. So i stand up to you, and you cower behind a cartoon. Thats funny.
You were warned nearly a decade ago that silver was gonna be dead but you disagreed, instead blaming everything and everyone for you being wrong.
I love this place.
PS....i didnt realize you were disabled. I will no longer offer resistance to your "opinion". I don't want to be equated to a TV personality. The forum is all yours.
Knowledge is the enemy of fear
Since a decade ago I have been laughing at your warnings, profiting on the volatility. I have on many occasions stated the obvious, that when the banks are no longer able or willing to manipulate the price down, it will rise. Guess what, DOJ is prosecuting bankers for manipulating metal prices and suddenly price rises. LOL
Yeah, I was wrong about PM prices being manipulated lower. LOL. You were wrong about them not being manipulated.
My disability has nothing to do with PMs or the forum. Unlike you I do not want the forum to be all mine. I want it to be a place to discuss PMs and things that affect PMs. Go find a stock forum.
Give Me Liberty or Give Me Debt
Go find a stock forum.
I leave the forum all to you and your merry men for less than 72 hours and youve all made multiple references to the stock market.
What a hypocrite. But we already knew that.
Knowledge is the enemy of fear
GSR has a nice cyclic chart like anything else in the markets. The recent 9 year rise from 2011-2019 was totally out of whack for its long term history. But that's what you get with over sized manipulation of interest rates, PMs and SM's. The net correction from the 2020 GSR is going to be over-sized as well. We've already seen it drop from 126 to 76 in just a couple of months. Amazing drop. Eventually back into the "normal" long term range of 45-65. But at same point will probably have to fall under that range to drive to reset the PMs. The 2011 low was 31.
Note that when I last recorded date on gold vs silver, the amount of contract trading dollar value on the London exchanged showed about a 9-1 favor to gold. The amount of gold to silver in the earth's crust is of the order of 16-1. Above ground supplies ratio out to about the same 9-1. And in mining gold, silver is about 9X plentiful each year. Silver gets continually used up and never recycled back into the market.....it's just gone for good .....gold supplies only go higher every year. Silver supplies are basically stagnant. No matter how you analyze the ratio you can't come up with anything physical or financial that would suggest it should be higher than 25-1 which is the highest number I could find from a scientist defining GSR in the earth's crust. 2/3 of silver comes from the by-products of mining other metals....mostly from copper and other base metal mines. There are relatively few 'all' silver mines. If base metal mining falters, so does silver mining. Gold is not affected in that manner. Why GSR has spent the past 20 yrs mostly in the 45-65 range, well above the "real market" ratios is unclear. .
GSR's recent crash came down nicely to touch the apex of the 5 yr wedge as well as shorter wedge and channel. Pretty precise on that drop. GSR is a nice tool to use alongside USDX, currencies, and PM prices. Looking for a good low target - pick the bottom of the 5 yr wedge....currently at 52. 2 yrs out it's down to around 45. Eventually that wedge lower line gets tagged. 52 is a key 20 yr support/resistance line as well. The Apex of the 20 yr wedge is at 62....another focusing point. The 5 and 20 yr wedges that created the massive rally will also define the future GSR low.