It all started with an innocent email from someone I follow on Linkedin suggesting I take a look at a gold widget. It said, “Please find below our gold spot price widgets. Updated every minute and available in 119 currencies, they will allow your visitors to precisely monitor the evolution of the gold price.” What followed was an interactive gold chart going back 10 years. The chart shows strong support at $1,200
I then went to Market Club to see latest pricing of gold. Hmmm $1222! I noticed that Silver was $17.75. The ratio between gold and silver ranges from 15 to 85. Quickly dividing $1222 by $17.75 yielded 68.81. I Googled gold/silver ratio and found Gold Silver website showing the ratio in various time periods:
Gold Silver Ratio History Charts
30 Day gold silver ratio 5 Year gold silver ratio
60 Day gold silver ratio 10 Year gold silver ratio
6 Month gold silver ratio 20 Year gold silver ratio
1 Year gold silver ratio 36 Year gold silver ratio
2 Year gold silver ratio
While the ratio is very high right now, it is still shy of 85, but it sure looks like something to watch closely. Suppose you are bullish on gold and think price could go to $2,000 per ounce. From this price that is a 64% increase. If the ratio stays the same between gold and silver at 68.81, silver would sell at $29. What if the ratio declines to qa more reasonable level. based on the charts a more reasonable level would be 45. If gold went to $2,000 45 times the price of silver, silver would sell at $44.44, a 150% increase.
That is exciting to me!