- Part I: HOW TO INCREASE YOUR NUMBER OF SILVER OUNCES BY TRADING PHYSICAL SILVER. ...
- Part III: Trading Physical Silver: PART III
What's happened since that post of 9 March in which we explained how we sold a portion of our silver bullion @$33.35 on 2/16/12 with all intentions of buying back at a lower price, and acquiring more ounces than originally sold.
For this installment which may be overly simplified for some, we're going to examine the Gold-to-Silver Ratio (G/S). The G/S has an inverse relationship to the price action of gold and silver. When the Ratio is declining gold and silver are running with the bull to higher US$ prices. Well, right now the Ratio is rising, so we know the metals are declining. The resultant ratio integer is the number of silver ounces required to buy one ounce of gold.
The number 50.6844 displayed in the right axis below tells us the cost for a gold ounce - in silver ounces. The Ratio is nearly correlated 100% with the metals volatility, rising ratio means silver's price is declining FASTER than Gold, but both metals cost less in US$'s. For this reason - silver's greater volatility - we use this tool as simply one other indicator of both metals' direction. For the moment all our indicators (see previous post) point favorably to get back more silver ounces than sold.
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