GSR = 99.96 this morning

jmski52

Wow. From what I understand, the only time that the GSR has been this high was about 4 years.

The fundamentals couldn't be much more positive for silver (increasing demand vs. 5 years in deficit supply) and yet silver is being clubbed now for 3 days in a row while gold remains resilient.

What can this be telling us?

psuman08

The silver squeeze was not real.

Higashiyama

“What can this be telling us?”

Silver was demonetized years ago and the gold/silver ratio has little meaning.

pragmaticgoat

Silver price knocked back two months in two days

TwoSides2aCoin

Tells me I can trade a hundred ounce bar for an ounce of gold and not get any change.

DoubleEagle59

Traded in one $20 Lib. at a Canadian coin show today for 100 oz. of silver.

DoubleEagle59

@DoubleEagle59 said:
Traded in one $20 Lib. at a Canadian coin show today for 100 oz. of silver.

Another dealer only worked on an 80:1 ratio, another was at 90:1 but the above dealer was extremely fair to me.

I had another $20 Lib. and was going to trade at 90:1 but I decided to wait as who knows if we'll get to 120:1 by the end of this week??

johnny9434

The yo you affect, up today down Wednesday, jmo ( i wish we had a crystal ball )

jmski52

I had another $20 Lib. and was going to trade at 90:1 but I decided to wait as who knows if we'll get to 120:1 by the end of this week??

I don't know about that, but gold should continue to be strong. However, silver's fundamentals couldn't be much better and I expect a nice move in both metals as money printing will be required in order to rescue the banks & the bond market this year.

jmski52

Gold and Silver are showing relative strength compared to the stock indices. While the GSR did run up over 100, it is now 99.6 which is still historically high.

Overnight, both metals had a relief rally while stocks took another hit. This week might be interesting, then again there is a mass liquidation in progress.

For those who don't think that the GSR has any significance (i.e. Higashiyama), do you think that silver is a good investment at this particular time? Or are you a 60/40 portfolio kind of investor? Your insights are usually pretty good.

DoubleEagle59

Silver is the deal of the century.

Silverstacker

Still 100 GSR as gold and silver fight back on hopeful economic news. Ive been buying both cause I felt the dip wouldn't last. Nobody wants trade interrupted and deals will be made.

Higashiyama

@jmski52 -- I can definitely imagine realistic scenarios where silver does well, but I think it will be driven more by industrial demand than as an inflation hedge. I think that central banks (especially but not only China) will continue to accumulate gold, and silver will be a follower. The global economy is just too big for it to serve as money.

With that said, I think we could see a kind of "high employment stagflation" scenario in the US and many of the post-industrial countries. In this scenario, de-globalization leads to stagnant real GDP, but solid employment. Perhaps silver could be viewed as an attractive alternative to cash and conventional investments in such a scenario.

derryb

Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?

RedneckHB

@derryb said:
Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?

Just 5 years ago platinum was 900ish. It's still 900ish. Is platinum more abundant than silver?

Higashiyama

@derryb asked “Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?”

There’s of course lots more oil then silver, but I’m not sure what you’re getting at?

derryb

@Higashiyama said:
@derryb asked “Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?”

There’s of course lots more oil then silver, but I’m not sure what you’re getting at?

comparing the two for what they are - consumable commodities.

RedneckHB

@derryb said:

@Higashiyama said:
@derryb asked “Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?”

There’s of course lots more oil then silver, but I’m not sure what you’re getting at?

comparing the two for what they are - consumable commodities.

That $63 oil was also $63 almost 20 years ago. Your choice of comparable "consumable commodity" supports Higashiyama's thoughts.

The futures GSR is now 103.5.

psuman08

Can someone explain to me why the GSR ratio is a valid metric. Until 50 years ago it was a metric controlled by the government. To me it is very apparent that silver moves independently from gold and this metric is worthless.

Meltdown

@psuman08 said:
Can someone explain to me why the GSR ratio is a valid metric. Until 50 years ago it was a metric controlled by the government. To me it is very apparent that silver moves independently from gold and this metric is worthless.

To my understanding it's more of a value metric and speculation determinate. For instance, gold bought at $1500ish a couple years ago can now net 100 ounces of silver. Those who believe silver is poised to take off can now get quite a bit more for their speculation.

psuman08

I understand what it is. I don't understand why it is valid today. For the first 175+ years of our country the ratio was based on the government, not the free market.

jmski52

Can someone explain to me why the GSR ratio is a valid metric. Until 50 years ago it was a metric controlled by the government. To me it is very apparent that silver moves independently from gold and this metric is worthless.

Historically, gold and silver prices have had a high correlation, not a low correlation. Aside from that, ratio analysis has been a fairly standard approach in financial circles - not just gold vs. silver, but also in terms of stock valuations.

For example, the most classic ratio applied in financial analysis is the P/E ratio which tracks the relative value of stocks in a particular sector vs. the relative value of stocks in a different sector on the basis of price vs. earnings. In the case of the Mag 7, many analysts give weight to the potential for price appreciation rather than the actual profitability.

Does this mean that P/E analysis isn't valid? No, it simply provides a reference point for current and future price movements. The same thing is true of the GSR (Gold/Silver Ratio) - as a reference point. Therefore, I don't consider the GSR to be as "meaningless" as one might believe.

derryb

@RedneckHB said:

@derryb said:
Just five years ago $63 oil was $25. Is silver more abundant or rarer than oil?

Just 5 years ago platinum was 900ish. It's still 900ish. Is platinum more abundant than silver?

Proof that one should also consider the demand side of the price equilibrium equation.

That $63 oil was also $63 almost 20 years ago. Your choice of comparable "consumable commodity" supports Higashiyama's thoughts.

Picked oil out of the blue. Most all other commodities have price cycles especially when inflation is considered. Gold is nowhere near the definition of "consumable commodity" as is silver.

blitzdude

I'd expect the GGR to go even higher, 120-130 perhaps. RGDS!

derryb

@blitzdude said:
I'd expect the GGR to go even higher, 120-130 perhaps. RGDS!

fear will keep GSR high, a lot of fear that greatly decreases the supply of available physical gold will drive the GSR much lower when silver becomes the "go to."