Gold/Silver RATIO: some thoughts
Updated
Hi Guys,
"The most common method of trading the ratio is that of hedging a long position in one metal with a short position in the other. For example, if the ratio is at historically high levels and investors anticipate a decline in the ratio that would reflect a decline in the price of gold relative to the price of silver, investors should simultaneously buy silver while selling short an equivalent amount of gold, looking to realize a net profit from a relatively better price performance of silver compared to that of gold."
(source: Investopedia investopedia.com/articles/investing/080316/historical-guide-goldsilver-ratio.asp)
Below Gold/silver ratio marking 29th Sept 2008 as the most recent peak at 88% same as today. I've added the same date both in #gold and #silver to show that 29th of Sept 2008 is the dip before skyrocketing. IMHO today's cause for such high ratio is not the same as in 2008. IMHO 2007-2008 Financial Crisis created a distortion that need to be taken into consideration.
Since 2011 Gold lost 45% whilst Silver 70%. More ounces of Silver are required to buy Gold but why? Today Gold is up 94% and Silver 73% from last time their ratio hit such an high level.
GOLD/SILVER RATIO investopedia.com/terms/g/gold-silver-ratio.asp
TRADING THE GOLD-SILVER RATIO investopedia.com/articles/trading/09/gold-silver-ration.asp
Hope the above clarifies but please do not hesitate to contact me for any queries, comments or feedbacks.
Thank you for your support and for sharing your ideas.
Don't forget to put a like if you appreciate the post and to follow me if you want to receive notifications on new and updated ideas.
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
"The most common method of trading the ratio is that of hedging a long position in one metal with a short position in the other. For example, if the ratio is at historically high levels and investors anticipate a decline in the ratio that would reflect a decline in the price of gold relative to the price of silver, investors should simultaneously buy silver while selling short an equivalent amount of gold, looking to realize a net profit from a relatively better price performance of silver compared to that of gold."
(source: Investopedia investopedia.com/articles/investing/080316/historical-guide-goldsilver-ratio.asp)
Below Gold/silver ratio marking 29th Sept 2008 as the most recent peak at 88% same as today. I've added the same date both in #gold and #silver to show that 29th of Sept 2008 is the dip before skyrocketing. IMHO today's cause for such high ratio is not the same as in 2008. IMHO 2007-2008 Financial Crisis created a distortion that need to be taken into consideration.
Since 2011 Gold lost 45% whilst Silver 70%. More ounces of Silver are required to buy Gold but why? Today Gold is up 94% and Silver 73% from last time their ratio hit such an high level.
GOLD/SILVER RATIO investopedia.com/terms/g/gold-silver-ratio.asp
TRADING THE GOLD-SILVER RATIO investopedia.com/articles/trading/09/gold-silver-ration.asp
Hope the above clarifies but please do not hesitate to contact me for any queries, comments or feedbacks.
Thank you for your support and for sharing your ideas.
Don't forget to put a like if you appreciate the post and to follow me if you want to receive notifications on new and updated ideas.
Disclaimer:
Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
Note
Gold is a hedge against the notion that the Fed has things under control.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.