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

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 already and also if you really want to support my channel what you can do is you can click on and give thumbs up to my sponsored or promotional videos where you may see me promoting a ICO or a penny stock or a small company a mining company gold silver that kind of thing and that's a way it costs you nothing except a small amount of your time and effort to support my channel by doing that alright thanks a lot I appreciate it and I'll talk to you again really soon


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