GSR screaming “Buy Silver!”

Posted | 16/06/2015 / Views | 3880
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Today the gold:silver ratio is sitting at 73.8 (those who subscribe to our daily email get a daily update of the GSR included) against a 100 year mean of about 45.  Sir John Templeton once said the four most expensive words in the English language are “this time it’s different”.  Technical analyst Hubert Moolman certainly believes this and recently applied his technical analysis to the gold:silver ratio with a startling result.  He plots the similarity between the last bull market and this one, numbering each key point 1 to 5.  He concludes as follows:

“The current pattern has not completed yet, and it would suggest that it will only complete at a point much lower than a ratio of 15. Such a completion of the pattern is consistent with the bullish fundamentals of silver (and gold) in relation to paper money – understanding that a lower ratio will likely mean higher gold and silver prices.. Furthermore, it is consistent with the scenario that we are in a downtrend in the ratio; therefore, being, more likely to go lower over the next couple of years.”

So let’s apply this to the current silver price and assume that gold doesn’t even move.  At a GSR of 10 silver would be priced right now at over $150/oz up 637% on today’s price.  There is no witchcraft in this nor indeed Sir Templeton’s oft repeated quote.  It is mathematical fact that over a long period of time all such measures revert to the mean, overshoot that mean and revert yet again and so on.  Sir Templeton would be suggesting ignoring this current GSR would be your lost opportunity…

GSR screaming “Buy Silver!”

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