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Comex gold/silver paper gold ratio (71) vs. actual turnover rates on the London Bullion market (<

roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
in Precious Metals
If you want to know what the real G/S ratio is, just take a look at the transaction on the LBMA:

Ounce-for-ounce: 4.4:1
Dollar-for-dollar: 15.7:1

LBMA gold and silver turnover rates

This was taken from the Kitco Gold Discussion Forum today. It does bring up an interesting point that with the current Comex gold to silver ratio of 71:1 the real trading volumes on the LBMA are <16:1 depending on what stat you use. One would think that the actual metal trading ratio's would be more indicative of the real scarcity of the 2 metals compared to each other.....not the paper on the Comex. The 71:1 paper price ratio is probably far from physical reality.

The long term gold:silver chart shows the last peak in the early 1990's at just >100:1. The ratio has been in a slowly cyclic downtrend ever since. The current wave down seems like the last of 5. So my guess would be a multi-year wave down ending up closer to the 16:1 ratio of the actual turnover rates.

roadrunner
Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold

Comments

  • AJ2525AJ2525 Posts: 477
    Hello,

    I do not understand what this means to PM prices.

    Please explain
    Some call it an accumulation not a collection
  • JoesMaNameJoesMaName Posts: 1,064 ✭✭✭


    << <i>Hello,

    I do not understand what this means to PM prices.

    Please explain >>



    In a nut shell -
    Silver may be gaining value relative to gold in the near future.
    Which suggests it may be a good time to pick some up.

    ...
  • dac076dac076 Posts: 817 ✭
    So my guess would be a multi-year wave down ending up closer to the 16:1 ratio of the actual turnover rates.

    So that would put gold at around $208 per ounce, right? image
  • Norseman88Norseman88 Posts: 962
    Well that 16:1 ratio is very close to the historic long term ratio of gold to silver and if you look up the historic price of silver it is way below it's all time high adjusted for inflation so it cetainly isn't a stretch to say that silver is grossly undervalued compared to gold.
  • OverdateOverdate Posts: 7,017 ✭✭✭✭✭
    I recall that the all-time high for silver was around $50 per ounce in January 1980, which would be about $135 today in (official) inflation-adjusted dollars and probably considerably more in real terms. So silver is selling for less than 1/10 of its peak price in terms of actual purchasing power.

    My Adolph A. Weinman signature :)

  • Norseman88Norseman88 Posts: 962


    << <i>I recall that the all-time high for silver was around $50 per ounce in January 1980, which would be about $135 today in (official) inflation-adjusted dollars and probably considerably more in real terms. So silver is selling for less than 1/10 of its peak price in terms of actual purchasing power. >>



    And if you go back in time even further I believe there were times charted out that the price of silver was in excess of $400 in purchasing power inflation adjusted for the buying power of todays dollar.
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