What is the GSR and why is it used ?
TwoSides2aCoin
Posts: 44,270 ✭✭✭✭✭
Does it matter and what is its purpose ?
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TwoSides2aCoin
Posts: 44,270 ✭✭✭✭✭
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It might matter.
The whole purpose is to help put into perspective the relative potential for the future price movements of both metals.
While the metals can both move in the same direction because they reside in the same asset class, they are also affected by different factors, i.e., monetary vs. industrial uses. Gold is mostly monetary; silver is either/or.
As such, gold and silver have different supply/demand relationships and therefore the relationship between the two can be monitored so as provide insight as to which is a better speculation at any given point in time.
I knew it would happen.
I don't even look at it anymore. I consider it irrelevant. Supply, demand, new uses of metal, political and economic situation constantly changes, so thinking a ratio is a standard IMO just doesn't apply. Whether the GSR is 30, 80, or 120.... so what? But I suppose some like to play with numbers. Just my opinion. If playing the ratio works for some.... no problem.
I have an associate who says when the GSR reaches a certain number (40:1, 50:1, ? ) He didn't say , but he said he will convert all his silver to gold.
I like to do that with aluminum and copper. Swap it for silver and gold.
GSR in this day in age is irrelevant. One is worthless gutter metal the other is the Metal of Kings. RGDS!
25 year GSR chart:
Because gold and silver tend to move in tandem, the GSR tells us when the price of one gets out of whack compared to the price of the other. This increasing or decreasing spread tells us which is the better bargain at current prices.
The GSR (actually the silver to gold ratio) is determined by dividing the price of gold by the price of silver. A GSR of 50 tells us it takes 50 ounces of silver to buy one ounce of gold.
Since 1970 the GSR's mean average is about 60. A higher than average GSR tells us silver is a better value while a lower than average GSR tells us to choose gold. Many successful traders use the GSR to flip flop between the two metals. The current GSR of 72.7 favors buying silver.
All of this of course is based on the assumption that equilibrium will always bring the GSR back to it's normal average.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
it indicates if the victim was shot at close range or from a distance
Some of these posts you don't even have to look at who wrote it...then your eyes move up and Yup, it's the same name as before
^ c’mon bro ( or sis)... we have to appreciate consistency. Blitz is a lovable associate with his own convictions.
he's an anomoly
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey