Tuesday , 12 November 2019


UPDATE – Gold:Silver Ratio Suggests Much Higher Future Price for Silver (+24K Views)

Silver is currently greatly undervalued relative to its average long-term historical relationship with gold and, as such, it is realistic to expect that silver will eventually escalate dramatically in price. How much? This article applies the historical gold:silver ratios to come up with a range of prices based on specific price levels for gold being reached.

By Lorimer Wilson (www.munKNEE.com)  – “ The internet’s most unique site for financial articles! (Here’s why)”.

Gold to Silver Ratio

How both gold and silver perform, in and of themselves, does not tell the complete picture. More important is the price relationship – the correlation – of one to the other over time, the gold:silver ratio.

Let’s look at the gold:silver ratio from several different perspectives:

  • Over the last 50 years, the average value of the gold-silver ratio was approximately 57:1.
  • Over the last 25 years, the average value of the gold-silver ratio was 64:1.
  • Over the last 10 years it was 66:1.
  • Over the last 12 months, it was 80:1.
  • since 1985 the mean ratio has been 45.7:1

Let’s now look at the various price levels for gold and the various gold:silver ratios mentioned above, one by one, and see what conclusions we can draw.

First let’s use the price of $1,400 for gold and apply the gold:silver ratios mentioned above in approximate terms and see what they do for the potential % increase in, and price of, silver.

  • Gold @ $1,400 using the 57:1 ratio (50-yr. avg.) puts silver at $24.56
  • Gold @ $1,400 using the 66:1 ratio (10-yr. avg.) puts silver at $21.21

Now let’s apply the projected potential parabolic peaks of $2,000, $3,000, $5,000 and $10,000 to the various gold:silver ratios and see what they suggest is the parabolic top for silver.

Silver’s Potential Price Range With Gold At $2,000

  • Gold @ $2,000 using the ratio of 57:1 puts silver at $35.09
  • Gold @ $2,000 using the ratio of 66:1 puts silver at $30.30

Silver’s Potential Price Range With Gold At $3,000

  • Gold @ $3,000 using the ratio of 57:1 puts silver at $52.63
  • Gold @ $3,000 using the ratio of 66:1 puts silver at $45.45

Silver’s Potential Price Range With Gold at $5,000

  • Gold @ $5,000 using the gold:silver ratio of 57.1 puts silver at $87.72
  • Gold @ $5,000 using the ratio of 66:1 puts silver at $75.76

Silver’s Potential Price Range With Gold at $10,000

  • Gold @ $10,000 using the gold:silver ratio of 57:1 puts silver at $175.44
  • Gold @ $10,000 using the ratio of 66:1 puts silver at $151.52

It would appear that, any way we look at it, physical silver is currently undervalued compared to gold bullion and is in position to generate substantially greater returns than investing in gold bullion.

Gold to Silver Ratio Conclusion

History will look back at the recent artificially high gold:silver ratio as an anomaly caused by the world being deceived into believing that fiat currencies are real money, when in fact they are all an illusion.

This fiat currency experiment will end badly in a currency crisis and when that happens, as it surely will, gold will go parabolic and silver along with it – but even more so – as the gold:silver ratio adjusts itself to more historical correlations.

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19 comments

  1. Great refresher article from a little over a year ago, and my comments posted then seem to still make sense:

    RE: First let’s use the price of $1,300 for gold and apply the gold:silver ratios mentioned above in approximate terms and see what they do for the potential % increase in, and price of, silver.
    Gold @ $1,300 using the 45:1 ratio puts silver at $28.89
    Gold @ $1,300 using the 13.99:1 ratio puts silver at $92.92

    Today 05/09/14, Gold is $1287 and Silver is $19.15, which tells me that not only is Golds value being depressed but Silver’s value is being even more suppressed!

    Therefore it is logical that when both “recover” as the value of the US$ declines against other currencies, both Gold and Silver will rapidly return to the values mentioned in the above article, especially if the rest of the World decides to begin to not put all its money into US$ as they are now doing by trading with each other in other currencies than the US$.

  2. One question I have that you may be able to answer is this:

    Is either Gold or Silver subjected to “naked shorting” more than the other and if so which has been affected to a greater extent?

    If as I expect, Gold has been “manipulated” far greater by “naked shorting”, then perhaps this is yet another reason why investors will begin to add ever more Silver to their holdings, which will increase both Silver’s demand and value!

  3. Remember the Lone Ranger used to say as he galloped into the sunset:

    “Hi Oh Silver, and Away…”

    As I’ve posted before, I believe that Silver may be the better choice in the near future because of the buzz around wearing, owning and trading Gold… For many it attracts far too much attention, especially from the Gov’t.

  4. Salute for a GREAT article which I believe will change the thinking of many PM investors!
    +
    Also not mentioned above is the fact that if owning Gold is suddenly made illegal again, which has happened in the past in the USA, chances are that owning Silver will not be made illegal at the same time giving investors a bit of breathing room to “plan ahead”…