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Weekly Touchpoint: Review of 30-Year High Gold-to-Silver Ratio

Posted By Isaac Nuriani |

Silver spends most of its time obscured by the brilliant reputation of gold. But those who look past the white metal could be making a tremendous mistake. As a safe haven, silver actually has outperformed gold during some of the worst periods in America’s economic history. The decade of the 1970s, for example, and the years of the 2008 global financial crisis. And now, a key metric suggests silver could be a smarter purchase right now than at almost any time in the last 30 years. It’s worth considering how you could use it to protect your own portfolio. Here are some market insights that could help you make better decisions:

  • The gold-to-silver ratio, considered one of the most important metrics in determining the right times to both buy and sell silver, is now at its highest level in almost 30 years. The ratio is a measurement of the number of ounces of silver it takes to buy one ounce of gold. The figure increases as the disparity between the per-ounce price of silver and per-ounce price of gold widens; a higher ratio suggests a greater undervaluation of silver, which could mean means silver’s price is poised to move significantly higher. With the price of silver presently at $15.01 per ounce and gold at $1,344.90 per ounce, the ratio is close to 90, a level unseen since 1991 – in fact, it’s a statistical extreme. Refer to capital.com to learn more.
  • Are you one of those people who still thinks the U.S. economy is just fine because the 4% unemployment rate says it is? A recent Augusta article sheds light on the uncomfortable truth that the nation’s gross domestic product (GDP) would be shrinking if not for the trillions in debt generated at both government and consumer levels. Not convincing enough? How about the news that within the supposedly robust workforce, nearly 1 in 3 people with a “side hustle” needs the work just to afford the basics? An analyst at the personal finance website bankrate.com put it in brutally clear terms: “Though the economy is strong, many Americans are finding it necessary to work on the side to make ends meet.”
  • Are we inching closer to war – real war – with China? The U.S. and China obviously have been political and military rivals for decades, but some people have suggested the close economic relationship cultivated by the two countries means any chance of an actual war is nonexistent. But how about now? Trade relations between Washington and Beijing are deteriorating rapidly, and the tone of communications is growing increasingly undiplomatic. A recent Bloomberg article suggests the possibility of war is more likely in the shadow of all of this trade discord: “As President Donald Trump and other policy makers in both the U.S. and China take actions that reduce the two countries’ economic interdependence, the economic buffer against military conflict is being eroded.”

Because gold and silver have the ability to outperform other assets during periods of economic turmoil, many people consider precious metals during those times as safe-haven assets to help them protect their money. They also tend to look to gold and silver when diplomatic relations sour between heavily militarized global powers, because the result of those contentious relations can be economic turmoil. Sometimes, however, changes in fundamental factors affecting silver, gold or both provide an especially compelling reason to buy. Many experts would say that’s the case right now due to the state of the closely watched gold-to-silver ratio. It’s as high as it has been in almost three decades, so astute observers may conclude that an extraordinary buying opportunity is sitting right in front of them. To learn more about adding silver – and gold – to your portfolio, call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com.

Augusta cannot guarantee, and makes no representation, that any metals purchased by a customer will appreciate at all or appreciate sufficiently to make a profit, and there is no certainty that any metals can be sold for a profit. The future value of the coins you purchase cannot be predicted. You could lose money. Don't purchase Augusta products with money you can't afford to lose. Prices may rise and fall over time or rapidly. Past performance of any coin does not guarantee future results. Premium coins are sold for more than the value of the precious metal they contain. Augusta's prices and buy-back prices are determined and controlled by Augusta. This purchase is speculative and unregulated.