Gold-Silver Ratio Exploding
The gold-silver ratio hasexploded to one of the widest margins in history, with gold trading almost 85times the price of silver. The ratio set by law is supposed to be 15-to-1; howdid we get to 85-to-1? This is the highest level since the 2007-2008 globalfinancial crisis.
To some degree, having such anextensive history on how the prices of gold and silver relate to one anothercan be useful for investors. Today's ratio of nearly 85-to-1 would certainlysuggest that silver could be the more attractive investment opportunity thangold at these prices. Of course, markets don't have to make sense and the ratiocould widen still.
When investing in any financialproduct, hard asset or commodity, there are no rules, only probabilities.Although we like both gold and silver here because of the large spread, wewould be bigger buyers of silver. We are looking for both gold and silver tobreak out to the upside, but first we must suffer through the pain ofconsolidation.
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Bubba@bubbatrading.com www.bubbatrading.com/ Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.