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Gold/Silver ratio
cagcrisp
Posts: 1,057 ✭✭✭✭✭
Today’s LBMA fix for Gold/Silver ratio was the Highest in 29 years…
02/28/2020 Gold = $1,626.35
02/28/2020 Silver = $17.185
Gold/Silver ratio = 94.64:1
03/06/1991 Gold = $363.60
03/06/1991 Silver = $3.831
Gold/Silver ratio = 94.91:1
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Au/ag ratio has become meaningless as far as expecting silver to "catch up" with gold. Silver conspiracy theorists aside, the facts are that the market is what it is. A combination of the paper market and viable fractional gold allows almost anyone to invest in gold with great liquidity at any investment level. No need for the poor man's gold to follow gold any more.
There are Still a Boatload of people "thinking" Silver will catch up in the ratio...
It can catch up, but catch up to what? Look at this recent run up, the ratio got worse. At least it collapsed in 2011, wasn't it just under 40 to 1 for a bit?
My thought process is I prefer silver at this ratio. I can purchase 90 ounces of silver or 1 ounce of gold. If the ratio stays static, the silver is easier to divest from in stages. If the ratio collapses, then silver increases in value better than gold. I have yet to see any arguments that the ratio can get any worse.
I only consider fractional gold when I find promotions on 1/10th ounce Constitutional coins.
I guess that if I was very wealthy I could afford to hedge my precious metal purchases and develop a different approach.
i'm warming up to the "gsr old news" idea.
anyone not stockpiling silver for the last few years will live to regret it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I feel the ratio widened, due to silver being an industrial use metal. With plant production slowing, less need for the metal. It could go to 125:1.
What is silver used for in industry?
The industrial demand for silver
Silver has many industrial uses, accounting for more than half of annual demand worldwide over the last five years.
This means that economic growth can affect silver prices far more than it affects gold. Only 10-15% of annual gold demand worldwide comes from industrial use, the rest going to jewelry and investment.
Because of silver's physical strength, brilliance, malleability and ductility (it can be squashed or pulled into shape), people have also used silver in jewelry, tableware and fine art for thousands of years. Industrial applications use silver's conductivity (the highest of any element for electricity and heat) as well as its sensitivity to light and anti-bacterial qualities.
Today silver is invaluable to solder and brazing alloys, batteries, dentistry, glass coatings, LED chips, medicine, nuclear reactors, photography, photovoltaic (or solar) energy, RFID chips (for tracking parcels or shipments worldwide), semiconductors, touch screens, water purification, wood preservatives and many other industrial uses. Washington-based industry group the Silver Institute calls it "the indispensable metal".
The biggest consumers of silver for industrial applications this past decade have been the US, Canada, China, India, Japan, South Korea, Germany and Russia. Over that time silver demand from older industries has faded, only to be replaced by new technological uses.
Here we look at three major industrial uses of silver – photography, solar energy, and medical – and how they are changing.
Photographic silver use
Photography used to be the No.1 end-use of the silver, using silver nitrate to create light-sensitive halide crystals. This sector includes consumer photography, the graphic arts and radiography (x-rays), both in medicine and industrial inspection of heavy machinery.
Photographic silver demand hit its peak in 1999, representing 25% of total fabrication. The film market in the United States alone used over 93 million ounces of silver that year, more than one ounce in every ten sold worldwide. Within five years, however, photographic demand slipped below 20% of total demand, and it fell to 9% by 2013.
The growth of digital photography has played the greatest part in this decline. Still-photography used in x-rays remains a big consumer of silver, but total photographic demand has contracted 70% by weight from its peak.
Photovoltaic (solar energy) silver demand
Silver's sensitivity to light has found fast-growing use in the photovoltaic, or solar energy, industry. Using silver as a conductive ink, photovoltaic cells transform sunlight into electricity.
Photovoltaic use first made an impact on silver demand in 2000, just as photographic use began its decline, with the sector consuming 1 million ounces that year. This was not even one tenth of the amount used by the electronics industry, but by 2008 the photovoltaic sector was consuming 19 million ounces per year as major government subsidies promoted the industry's growth in the US, Western Europe and particularly China.
Photovoltaic demand for silver exploded on these taxpayer subsidies, growing at a 50% annual rate and starting to fill the gap left by the declining photographic industry. But with subsidies then cut as the financial crisis wore on, and with silver prices doubling in 2011 to hit almost $50 per ounce – the all-time peak set in January 1980 – silver industrial demand declined for three years running.
Higher prices meant technology developed to use less silver in producing the same amount of solar power. This "thrifting" has now cut the quantity of silver by up to 80% per solar cell from a decade ago. So despite a rise in total solar panel production, US photovoltaic demand for silver has actually fallen in recent years. In Europe, those earlier government subsidies led to huge over-production, and excess capacity in the industry saw many solar-cell manufacturers go bankrupt, also hurt by competition from China.
Even so, global photovoltaic demand for silver has grown at a compound annual rate of 20% over the last decade, according to the Silver Institute's World Silver Survey 2014. China is now the leader in solar-panel manufacturing, producing 60% of 2013's global output. Solar capacity in China leapt from 0.8 to 18.6 gigawatts between 2010 and 2013, with Beijing setting a target of 70GW by 2017.
Medicine's growing silver use
Of all chemical elements, silver has the most powerful antibacterial action with the least toxicity to animal cells. Because like the other, more expensive precious metals, it interrupts the ability of bacteria cells to form certain chemical bonds essential to their survival. But cells in humans and other animals have thicker walls, and are so undisturbed.
When added to water, silver releases silver ions. These ions also kill and prevent biological growth, again disabling the metabolism of germs and hindering their membrane functions. The value of these properties has been known and used for centuries.
The Ancient Phoenicians, for instance, found they could keep water and other liquids fresh by storing them in silver-coated bottles. American pioneers 3,000 years later prevented dysentery, colds, and flu by putting silver dollars in milk bottles. Silver biocides are today found in hospital water systems, catheters, furniture and almost every tool in the operating theatre. Silver-copper ionisation has also been approved as a primary treatment for long-term control of legionella in air-cooling systems.
Silver nitrate was used in the late 1800s to cure new-born babies of certain eye infections, and doctors found that wounds healed faster with silver dressings. The metal was used in sutures for surgical wounds and to cure ulcers – a use which continues today, with silver-embedded bandages proven to be especially effective in healing the wounds of burn victims.
During the 1920s, over 3 million prescriptions per year were written in the US for medications containing silver. Due to the introduction of penicillin in the 1940s, antibiotics became the standard treatment for bacterial infections, and this use of silver diminished. But new scientific research has since allowed fresh expansion of the medical industry's use of silver.
Nanotechnology uses silver as an antimicrobial, reducing the metal to particles measured in billionths of a metre. This nanosilver acts as a catalyst for oxidation, generating oxygen from air or water which destroys the cell wall membranes of single-cell bacteria. Because it only "turns on" this reaction, it does not pollute the surrounding environment.
In sum, there is much more to silver than its historical use as a monetary metal, or its ongoing use in jewellery and investment. Industrial and technological use of silver accounts for well over half annual demand. That demand plays an important and changing part in helping set long-term price direction.
Successful Trades: Swampboy,
Pretty much everything you posted has been parroted for years.
Silver is a byproduct of multiple mining processes. It's average cost to produce allows those producers to commit to contracts to provide silver to end users at very affordable rates. Gold on the other hand is mined directly. Costs keep increasing, significantly more man hours, fuel costs, and equipment costs are involved. Royalties to land owners are involved. The two largest populations, China and India, heavily believe in owning gold.
We are not running out of easy to obtain silver. Gold continually becomes more costly and harder to access.
That being said, I do believe that silver has a greater long term upside than gold percentage wise. I do not believe that PMs are a primary investment. They are a complimentary investment. Even the greatest PM hawks recommend 15% or less in portfolios.
The primary stimulus in PM values increasing depends on major investment funds adding them to their portfolios.
I agree with most of what you said. I disagree that Silver will outperform Gold long term on a percentage basis...
Over 97 right now.
MY GOLD TYPE SET https://pcgs.com/setregistry/type-sets/complete-type-sets/gold-type-set-12-piece-circulation-strikes-1839-1933/publishedset/321940
98:1
near 100
a lot of silver paper holders etf unloading to offset the loss from the market, maybe the reason for the drop
@dennis1219 said:
I feel the ratio widened, due to silver being an industrial use metal. With plant production slowing, less need for the metal. It could go to 125:1.
and your reasoning for gold ?
Golds going up because the treasury bond market yields are collapsing
@cagcrisp gold is going down
The GSR is telling us exactly the opposite.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Gold $1678, silver $16.77. 100-1.
(And gold/platinum is approaching 2/1.)
My Adolph A. Weinman signature
100:1
Prediction affirmed...
long term, this is short term
Gold to 1800: Silver to 16. Gold up due to panic, silver down due to economic turmoil. And Bourbon up, because I like it.
@dennis1219 I like it!
My retirement account is taking a beating, so I may as well enjoy my AGEs and 4 fingers of Blantons on the rocks.
MY GOLD TYPE SET https://pcgs.com/setregistry/type-sets/complete-type-sets/gold-type-set-12-piece-circulation-strikes-1839-1933/publishedset/321940
I disagree that Silver will outperform Gold long term on a percentage basis...
The GSR is telling us exactly the opposite.
Timing is everything, but you gotta get it right. The bottom line is that silver still has a monetary component and it will eventually come back strong, even as gold continues up.
I think that silver's time is still a ways off.
I knew it would happen.
The Longer you go the worse it's going to be for Silver...
The Longer you go the worse it's going to be for Silver...
That's not saying much about the stock market. But, I'm really more concerned about the bond market.
I knew it would happen.
Are you not able to make the trades with your account?
If so why did you not bail earlier?
If not, why?
Keep an open mind, or get financially repressed -Zoltan Pozsar
You Need to be more concerned about the bond market...
100 to 1. Going up !
ALL TIME HIGH for intraday Gold/Silver ratio = 102:1
Silver tanking. 118:1. Who would have thunk it.
That was quick
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Wow! Gonna have to try to trade my 1 OZ AGE for ASE's.
114:1
Gold @ $1,509
Silver @ $13.20
I knew it would happen.
The Highest Gold:Silver ratio that I saw in the wee hours of the night was:
122:1
Eagles are double melt so you should be able to get 115-6or round about for 1/2oz gold...
Glad I traded some at 85/1. And I thought that was high.
117:1
Gold @ $1,487
Silver @ $12.70
What a beatdown!
I knew it would happen.
122:1
Gold $1,473
Silver $12.20
WTT. Four gold eagles for one monster box of silver Eagles . 2020s or 1996s. However a man wants to trade. Sorry this offer is for men only. No women or children. It's too dangerous for them.
Silver Eagles are selling for north of $20 each on eBay.
My Adolph A. Weinman signature
Similar opinion to mine. I believe the expansion in the ratio since the 1980 peak is primarily if not entirely due to a perception difference where fewer people (at least in the western world) view silver as a money substitute.
High GSR ratio is a result of gold seeing a higher percentage spot price gain than silver. Works the same way with falling prices.
Keep an open mind, or get financially repressed -Zoltan Pozsar