Gold Silver Ratio

Whilst gold tends to grab all the headlines some would argue silver should be the real focus in what’s gone on this year.  Currently the Gold Silver Ratio (GSR) is sitting at a very high 62:1.  It was only a couple of years ago it was 40:1 and over hundreds of years it averaged about 18:1.  Silver has come off nearly 60% from its 2011 peak compared to gold’s 35%.  If you believe all the price declines this year are largely Comex manipulation you will understand the silver market is smaller and hence more volatile. We have some clients watching this ratio and switch between gold and silver accordingly.  Some even talk of tax benefits of taking a loss on gold and moving to silver where they see more gains.  On any level whilst there is approximately only 4-5 times more silver above ground, it’s extracted at only about 9 times more and it is actually used up in industry, a 62:1 ratio doesn’t seem to make much sense and things have a habit of reverting to means…