Gold to Silver Ratio Trading Strategy // commodities investing 2018 2019 2020


Gold to Silver Ratio Trading Strategy // commodities investing 2018 2019 2020 explained david moadel welcome to looking at the markets with
David Modell today I wanted to discuss with you the gold to silver ratio I want
to tell you what it is and how you could possibly use it as an indicator if
you’re a buyer or seller of gold or silver or both so let’s take a look at
it and the website I’m using right now this is a chart from macro trends dotnet
wanted to give them credit alright so this is a chart showing all the way back
from the late 1990s all the way through now and this is the gold to silver ratio
now first of all what is the goal to silver ratio very simply they just take
the price of an ounce of gold and divide it by the price of an ounce of silver in
other words how much silver would it take to buy an ounce of gold alright or
to put it another way how much more expensive is gold compared to silver and
as you can see the mean or average is around 50 or so and when it gets up to
around 80 then gold is much more expensive than silver and when it gets
down to around 30 silver is much more expensive than gold and you might
actually notice that at least since the late 1990s there has been a what you
might call a resistance level here it tends to go up to around 80 and then
mean revert or go back down to the average of around 50 goes up to around
80 mean revert goes down to around 30 or so I don’t know if you would call that
support level necessarily because it only seems to have gone down there once
on this chart but it went down to around the low 30s and then it mean reverted or
went back to the average of around 50 back up to 80 a little bit of mean
reversion and now it’s back up to around 80 or so again which seems to be a
resistance level now there are no guarantees in the stock market of course
or the commodities market just because it is bounced down from 84 to you know
three times here of course it could go higher than 80 it could go up to 90
could go up to the high 90s alright there’s no guarantees all right
just because it bounced off of the low 30s that doesn’t mean that it can’t go
below 30 of course it can go below 30 all right so the mean or average is
around let’s say around 50 or so so I tend to believe in mean reversion I tend
to blend there no guarantees okay but I tend to believe that when an indicator
goes way too high it usually at some point will come back to the average all
right or the mean that’s called mean reversion or when it goes too low it’ll
probably at some point come back to the mean or average and so when the gold to
silver ratio goes up around to the 80 level which is where it’s at right now
actually as I’m making this video then if you have gold and silver you may want
to consider selling some of your gold and buying some silver you might just
want to consider it you have to make your own decisions I can’t I cannot tell
you what to do but it’s something to think about because when it’s up here
that means that gold is way way way more expensive than silver okay and when it’s
down here you might want to consider selling some of your silver and buying
some gold because when the gold to silver ratio is
down here that means that silver is way way way more expensive than gold okay
now just because the gold to silver ratio is way up here around 80 yes that
means that gold is way more expensive than silver that doesn’t mean that gold
is expensive just means it’s more expensive than silver okay it might be
cheap compared to palladium or platinum or the stock market or whatever or the
dollar or whatever I’m just saying if you have both gold and silver you might
want to consider lightening up on your gold holdings and get some silver
instead all right when it’s way up here and the opposite is true if it goes way
way down you may want to lighten up on your silver holdings and focus more on
buying gold when it’s down here alright so if you want to take on a little more
risk when it’s way up here and you believe it’s going to mean revert back
to 50 or so the gold silver ratio then you could and this is risky
be aware okay this is a risky strategy you coup
actually by silver and short the same amount the same dollar amount of gold
all right when I’ll repeat that way it’s up here you might consider for example
let’s say it’s up here or up here up here up here when the gold the silver
ratio is really high you might consider as a very risky strategy okay but you
might consider going long or buying silver and shorting the same dollar
amount of gold because you believe that it’s going to mean revert back to 50
which would mean that relatively speaking the price of gold would go down
compared to silver or the price of silver would go up compared to gold
alright when it’s down here when the indicator is down here the gold is
silver ratio again this is risky but you could try if you want to you could try
going long gold or buying gold and shorting the the same dollar amount and
or an equivalent dollar amount of silver because you believe that eventually the
gold of silver ratio is going to mean revert back to around 50 or so in which
case relatively speaking the price of gold would go up compared to silver and
the price of silver would go down compared to the price of gold alright
that’s a riskier strategy but it could work if you do it very carefully very
cautiously take small position sizes and mitigate or limit your risk at all times
but the safer way to go safer way to go probably would just be when it goes away
up here maybe just by if you already have both maybe just unload or sell some
of your gold and buy more silver always in small amounts and always don’t take
on any risk you cannot afford to lose alright so that is the gold to silver
ratio it’s something you want to check on a regular basis especially if you’re
into trading gold or investing in gold or silver it’s an indicator one of many
that you can use alright so if you’d like some help with trading investing
these stocks options whatever it is you can contact me at any time my name is
David Modell and my email address is David Modell at gmail.com if you found
this video helpful please give it a like on YouTube give it a thumbs up and leave
a comment and subscribe to my youtube channel if you have not done that
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that alright thanks a lot I appreciate it and I’ll talk to you again really
soon

6 thoughts on “Gold to Silver Ratio Trading Strategy // commodities investing 2018 2019 2020

  1. Yeah Silver will be good once Gold wins over $1400-1500 on the way up to $1700-1800, until then short term trading with silver is almost a fools game.I mean I guess you can play the etfs and make a little bit of $ here and there.

  2. I used to be a silver stacker and hang out with the duct tape crowd. In the last few years a silver got crushed for a continued amount of time most silver stackers gave up but I still have a bunch of 1 oz. silver eagles…..

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