The Silver Price & It’s Ratio With Gold
The Price of Silver
Before you buy Silver you should understand that the spot silver price can be volatile, as it fluctuates between industrial usage and a permanent store of value.
At times this can cause wide-ranging valuations in the market, creating volatility. Silver often tracks the gold price due to store of value demands, although the ratio can vary.
The Gold/Silver Ratio
The gold/silver ratio is often analyzed by traders and investors and buyers.
The ratio was fixed by law in the United States at 1:15, which meant that one troy ounce of gold would buy 15 troy ounces of silver; a ratio of 1:15.5 was enacted in France in 1803.
While the average gold/silver ratio during the 20th century was 1:47, recent research from Deutsche Bank shows that the gold/silver ratio averaged around 12x (hovering between 10x & 15x) in the Middle Ages.
Furthermore, Newton fixed the gold/silver ratio to 15.5x from 1700 till 1873, and as far back as ancient Greece, the existing gold versus silver mines varied between 10x and 13.5x.
The laws of physics and history tell us that this MUST revert to the mean, and is currently in fact doing so, having dropped from over 60:1 in 2009, to 38:1 as of April 2011.
“We have quite literally “bet the house on it” in fact, sold property in 2005, and gone “all-in” Gold & Silver back in 2008, and have never slept more soundly.”
We think that you should consider very carefully, if you have not already done so: