Silver has gone through a major price correction as it tumbled from the high forties (reaching $50 per ounce) to now resting at $34.84 per ounce as we head into the weekend.
It looks like that’s where silver will remain until trading opens back up next week.
So what does this mean for those investors out there who didn’t sell, or didn’t short the market that doubled in less than six months?
Should you buy into the market or sell now, take what hopefully are profits and don’t look back at this “bubble” that has been created and burst?
Well if you believe the bears, you should do just that.
Don’t look back.
Or should you.
While we don’t give investment advice, we definitely give our opinions on the matter.
And our opinions are that you should look strongly into ratio’s, investor sentiment, consumer sentiment, and the value of the dollar.
All these seem to have been helping to drive the price of silver through the roof over the past few months although the ratio of silver to gold was extremely high, historically, as silver outpaced gold price increases.
But with this correction, the ratio of Gold:Silver is now down to 42 meaning 42 ounces of silver buy 1 ounce of gold.
Is that still too high for you?
Well as you can see by this chart that gold to silver ratio has seen a high of 93 and a low of 32 in the last 15 years.
The high coming in 92 when the price of gold was around 350 and the price of silver was around 3.80 per ounce.
The low coming more recently, and we know what the prices are now.
So does that mean you should run out and buy a bunch of silver bullion from
or head over to eBay and stock up on everyone’s old jewelery?
But the gold to silver ratio is definitely something to watch.
If gold now goes on a move upwards while silver stays stagnant, we may want to reconsider.