Make the most of the GSR
24 August 2022
Dear Investor,
Silver, with its unique industrial and economic capacities, should not be overlooked by investors looking to diversify their portfolios. However, many of our clients struggle to identify the most effective ratio of gold to silver exposure in their investments for their specific goals and outcomes, and how to capitalise on the gold-to-silver ratio (GSR).
The gold-to-silver ratio is simply a way to describe how many units, usually ounces, of silver are needed to purchase one unit or ounce of gold.
What is essential for investors to understand are the specific climates that lend themselves to buying and selling gold or silver, and the certain trigger points in the GSR data that indicate these climates.
Silver is considered an effective support beam to gold investments due to its reliability and consistency as a currency and investment strategy, which is why investors consider the GSR as a catalyst for their purchase or selling of precious metals.
Along with gold, silver’s historical ties to currency and primitive economic systems have led to an incredible ‘bounce-back’ status, where it recovers and rises persistently. Over the past 10 years, the latter half of which has consisted of unprecedented and international social, economic and governmental volatility and instability, the gold-to-silver ratio has consistently recovered and shown strength.
Over the past 10 years, the gold-to-silver ratio has been steadily increasing, even after the notable effects of the COVID-19 pandemic that widely affected international economic systems- as the graph indicates, the ratio has already recovered to pre-pandemic numbers, which cannot be said for many other, more volatile markets.
Focusing our scope on the last year, gold-to-silver ratio data reiterates to investors the strong and steady increase of gold and silver value.
When the GSR is approaching or exceeding 100, as it is now, it can be more profitable to sell your gold assets in exchange for silver. Conversely, when the GSR is approaching 50, it is similarly profitable to sell your silver in exchange for gold.
For clients holding Pool Allocated Gold that are thinking of trading to Pool Allocated Silver, as the GSR heads towards 100, please give us a call on 1300 361 261 for preferential pricing.
Warm regards,