Gold-Silver-Ratio as a decision support for investments
How many troy ounces of silver can be bought for a troy ounce of gold. By answering this question, we want to find out which of the two precious metals will develop better, which precious metal is rather undervalued. From a geological point of view, there is about eight times more silver than gold in the ground.
The gold-silver ratio has changed significantly throughout history. In ancient Egypt, 2.5 ounces of silver are enough to purchase one ounce of gold. In the 1930s it already took about 100 ounces of silver. Currently the ratio is 96.63, which means that almost 97 ounces of silver have to be spent for one ounce of gold. On average, the gold-silver ratio has been around 60 over the last 45 years, and if the ratio is 80 or above, a buy signal for silver is seen. If the ratio is 40 or less, this is seen as a sell signal for silver.
Historically, when the price of gold and silver rises, gold performs better in the early stages. However, the little brother usually starts a race to catch up and often outperforms gold. This is particularly noticeable in times when fiat currencies are challenged. This is exactly what could happen again now. Confidence in the value retention of currencies is dwindling in the current period of massive money printing.
If you are looking for solid companies that have silver in their projects, Hannan Metals or MAG Silver catch your eye. Hannan Metals has copper-silver projects in Peru (San Martin project) and in Europe (Claire project, Ireland). The company has a ten-year track record of success in its efforts.
MAG Silver and its partner Fresnillo plan to start production at the Juanicipio project in Silverland Mexico in mid-2020. With this move, MAG Silver is approaching its goal of becoming a major player in the silver industry.
Current company information and press releases from Hannan Metals (https://www.resource-capital.ch/en/companies/hannan-metals-ltd/) and MAG Silver (https://www.resource-capital.ch/en/companies/mag-silver-corp/).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
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