Latest Gold-Silver Ratio Strategies for Trading - Gill Broking

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Latest Strategies for Trading the Gold-Silver
Ratio - Gill Broking
Created on 1st July 2019
https//www.gillbroking.com
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The gold-silver ratio is commonly used to obtain
helpful insights regarding the possible
movements of Gold and Silver. The stock traders
are often on the lookout for gold-silver ratio
in order to determine the buy and sell signals of
the two precious metals in the current market.
That being said, it is important for investors
and traders to know that the gold-silver ratio
can be of great help in improving your current
commodity trading strategies. Before we discuss
the benefits and strategies of Gold- Silver
ratio trading, lets have a look at the meaning
of this ratio.
What is the Gold-Silver

• To put in the simplest terms, gold-silver ratio
  is nothing but the total number of silver ounces
  a trader needs to sell in order to be able to
  gain one ounce of gold at the current market
  rates. For instance, when the price of the gold
  is equal to 1000 per ounce whereas the price of
  silver is trading at 16.65 per ounce, you can
  expect the gold-silver ratio to be approximately
  60.
• As per the surveys and reports, the gold-silver
  ratio has mostly been equivalent to 60 from the
  year 2001 to 2017. During this period, the
  maximum gold-silver ratio reached 80 whereas the
  lowest ratio was 40.
• The increase in the gold-silver ratio is mostly
  observed during the economic depression period.
  When gold outperforms silver, the ratio
  increases. This means the traders need more
  ounces of silver to get one ounce of gold.
• It was during 1991 when the gold to silver ratio
  peaked at 100 (probably the highest ratio). It
  happened due to the dropped prices of silver.

The Working of the Gold-Silver Ratio

• In 1991, the silver price was trading at an
  extremely low cost due to which the prices of
  the gold increased and the gold to silver ratio
  reached to its maximum number. The similar
  crisis occurred during 2008 when the prices of
  gold were increasing by leaps and bounds whereas
  the silver wasnt performing well in the market.
  Heres how gold to silver ratio works
• When the prices of gold in the market increase
  faster than that of silver, the gold to silver
  ratio increases.
• The gold-silver ratio drops when silver
  outperforms gold in the market and the price of
  the former increases faster than gold.
• The ratio also decreases if the price of the gold
  drops faster than that of the silver.
• On the contrary, the gold-silver ratio increases
  when the rate of silver decreases faster than
  that of gold.

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How to Trade the Gold-Silver Ratios?
The traders can take advantage of gold-silver
ratio trading. Here we have come up with two
major strategies that can help you on trading
gold-silver ratio. Read on
You can Use Gold-Silver Ratio to Discover the
Metal with the Strongest Trend

• The Gold-silver ratio is mainly used to determine
  which metal is likely to perform better than the
  other in the market. The traders who are planning
  to invest in gold or silver metals can use this
  ratio to find the prices of which metal can take
  a leap in the future and make their trade
  accordingly. Here are some major steps a trader
  can use to find the gold-silver ratio
• In order to find the current trend on gold to
  silver ratio, add a trend line to the ratio
  table. You will easily get to see the gold to
  silver ratio through GillBro app Chart. Type
  Gold/Silver in the search bar and the
  gold-silver ratio chart will appear.
• Do not forget to find out the trend on both the
  gold and silver individually.
• Utilize price action as well as technical
  indicators to find out the trading opportunities.
• Discover the trade size that goes well with the
  account size. Once done, set take profits and
  stop losses before processing the trade.
• Open a Free Trading Account

Trade the Highs and Lows of the Gold to Silver
Ratio
You may come across times when the gold-silver
ratio reaches historic extremes. There can be
either high historic extreme i.e. when the prices
of gold increase extremely faster than the
silver or low historic extreme i.e. when the
price of silver increases much faster than gold.
It is worth to note that the precious metals are
correlated to each other, though they have
different attributes. That being said, the
extreme high cannot go beyond 80 and 100 and the
extreme low cannot go below 60 and 40. Gold and
silver reaching an extreme level is the rare
incidence. It only happens when there is an
economic crisis in the country. But, when it
happens, the traders get good opportunities. It
is important for the traders to manage the risk
as the gold to silver ratios has broken the
historical extremes before and it can happen in
the future too. Also Read Know How To Start Gold
Trading Online Also Read Know How To Start
Silver Trading Online
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