The Gold Silver Ratio Explained

what is the Gold Silver Ratio, what does it mean, and why is it useful?

The gold sil­ver ratio explained

Today we are going to return to one of the old chest­nuts of the pre­cious
met­al invest­ing world and explain the rela­tion­ship between the two key
met­als gold and sil­ver. Specif­i­cal­ly we will give the answer to the
ques­tion of what is the Gold Sil­ver Ratio mean­ing?

As well you know, gold and sil­ver have been used for the last five
thou­sand years odd as “real mon­ey” and they have always had a tight
rela­tion­ship. Today in our mod­ern world the cen­tral plan­ers have weaned us
onto a paper worth­less cur­ren­cy (aka fake, or more tech­ni­cal­ly fiat
cur­ren­cy
), while they (I guar­an­tee you) are buy­ing and stor­ing up all the
gold and sil­ver they can find with both arms, and feet.

This rela­tion­ship is based on their scarci­ty and how much of it was com­ing
out of the ground — Obvi­ous­ly if one is much more com­mon (Sil­ver) than
the oth­er (Gold), then it is going to be worth less.

Through­out his­to­ry this rela­tion­ship (ratio) has remained fair­ly con­stant
at some­where between twelve to one, and six­teen to one.

So in oth­er words you would need twelve ounces of sil­ver to buy one ounce
of gold. Or Gold was twelve times more valu­able than sil­ver. Some­times you
would need six­teen ounces of Sil­ver to buy one ounce of Gold.

The Gold Silver Ratio Calculation Method

The ration between gold and Silver allows us to better understand market sentiment - and where it may be out of line

Gold Sil­ver Ratio Cal­cu­la­tion

So what is the Gold Sil­ver Ratio today? Well for that we sim­ply do the
sim­ple Gold Sil­ver Ratio Cal­cu­la­tion — Divide the cur­rent USD price of
Gold, into the cur­rent USD price for sil­ver. This gives us 1,350 divid­ed
by 22.6 which gives us a ratio of 59.7. So let’s call it 60! This is today
as of this writ­ing — This will change dras­ti­cal­ly in the future and I
invite you to revis­it this page five years from now!

This means that today we would need 60 ounces of Sil­ver to buy one sin­gle
ounce of Gold. That means the ratio is very high, and at some point it
will revert back to the his­tor­i­cal mean (as me men­tioned above, some­where
between twelve and six­teen).

See this ten year Gold Sil­ver ratio his­tor­i­cal chart here:

RagingGoldenBull.com_Gold-Silver-Ratio-10-Year-Chart

Start allo­cat­ing some of your invest­ing mon­ey today in some Sil­ver to
com­pli­ment your Gold in your per­son­al Pre­cious Met­als hold­ings — would be a
very smart thing to do. So don’t delay! Start to action that task today!

© Copy­right MMXIII RagingGoldenBull.com

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