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09/06/2019Precious metal price hike For this reason, silver is currently perhaps the better precious metals buy
Christoph Rottwilm
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Heraeus Holding GmbH
Coveted installation: Silver bars are becoming increasingly expensive
Upswing on the precious metal market - but what is hardly noticed: Silver has developed better than gold recently. There are some indications that this will remain the case in the near future.
7
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Trade war, Brexit, economic worries - various reasons have given the price of gold a boost in recent months. But what is often hardly noticed: The price of silver has also increased at the same time. At more than $ 18 an ounce, the white precious metal is now trading at its highest level in several years. There are also indications that silver could run well in the coming weeks and months - better than gold, if possible.
A look at the numbers shows: Already in recent weeks, the silver price stock market chart rose at a faster pace than the gold price stock market chart show. Thus, both precious metals have increased by around 20 percent since the beginning of the year. Looking at the period from the end of June this year onwards, however, silver has risen by just under 20 percent, while gold has seen a plus of just 7 to 8 percent in this shortened perspective.
This may repeat what has already been observed more frequently in the precious metals market: price increases are often first apparent in the gold market. Only with some delay does the price of silver also increase - but not infrequently at a faster pace.
The pattern can be well understood in the course of the so-called gold-silver ratio. This key figure, which has received much attention among precious metal connoisseurs, indicates the relationship between the price of gold and the price of silver and is determined by simply dividing the price of gold by the price of silver.
In general, the long-term average of the gold-silver ratio is just over 60, and market observers sometimes argue that this is a value that the index will return to sooner or later (although it hardly does gives a logical or reasonable justification).
What is certain, however, is that Ratio values beyond the 80s are considered comparatively high and in the past were only occasional and quite rare. And important: Very often, when the Ratio value had risen above 80, he slipped in the episode again. The reason for this was usually that in the calculation of the ratio of a price of silver flowed, which rose faster than the price of gold. Say: Silver could outperform gold in these phases many times.
Examples of this can be found in the history of the market. As reported by manager-magazin.de some time ago, the gold-silver ratio has more recently gone above 80 in the years 1995, 2003, 2008 and 2016 - each time outperforming the silver price against gold. From 1995 to the beginning of 1998, for example, the gold price fell by 24 percent, while the price of silver rose by 36 percent. Between 2008 and 2011, the discrepancy was even more drastic: a rise in the price of gold by as much as 105 percent was offset by a similar increase in the price of silver of no less than 407 percent. Even after the gold-silver ratio peak in spring 2016, silver will perform noticeably better than gold for several months.
Page 1 of 2
- Part 1: That's why silver is currently perhaps the better precious metal purchase
- Part 2: Fundamental situation on the silver market "increasingly sensitive"
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