Pt 30.989 Pd 28.584 Rh 143.874 Au 77.184 Ag 0.938

Gold-Silver Ratio Could Indicate the Early Stages of a Silver Breakout

 

Hi everyone, as I am also following market indicators, I present some news and updates on precious metals prices, forecasts, and trends. Today, an update on the “gold-silver ratio” updated July 24 and its signs.

The gold-silver ratio recently broke a significant support level, suggesting silver might start closing the gap with gold. Currently, the ratio is around 76-1, indicating silver is undervalued compared to gold. Historically, this ratio has averaged between 40-1 and 60-1, and tends to revert to the mean.

Despite the bullish trend for gold, silver’s industrial demand, particularly in solar energy, is driving its market. Silver demand is projected to hit 1.2 billion ounces this year, leading to a structural market deficit. As the demand for silver increases, particularly in solar panel production, the ratio may continue to adjust, making this an opportune time to invest in silver.

Additionally, every $75 increase in the gold price should correspondingly add $1 to the silver price, maintaining the 1:75 ratio. Therefore, if gold reaches $3,000 by the end of the year, silver would be $40—assuming the ratio remains unchanged (which is a big if). If a GSR of 1:60 is applicable, then with gold at $3,000, silver would be $50. For the full Mike Maharrey article, click here. 

Below is an updated graph of the gold-silver ratio.