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Gold to Silver Ratio

We often hear the silver analysts and writers say that throughout most of recorded history 15 ounces of silver bought 1 ounce of gold. These same writers say that silver is 15 to 17 times more plentiful in the earth????????s crust than gold and that is why this ratio of 15 or 16 to 1 makes sense.

Today with gold trading at $1,386.70/oz and silver trading at $32.38/oz it costs 42.89 ounces of silver to purchase a single ounce of gold. Many people believe that is all the reason they need to load up on silver. They expect to see that 15:1 ratio return. That would mean silver is a real bargain now. Some gold investors are in the process of selling gold to buy silver. There was a time when it cost 100 ounces of silver to buy one ounce of gold. Compared to that time silver is expensive today. However, there have been many times when 14 ounces of silver bought an ounce of gold. Compared to those times silver is very cheap today. The price has at times been set by governments and not always allowed to operate in a free market. This practice has distorted what might have been a free market history, but you can????????t always expect a free market, freedom is more rare than gold in history.

Here is a bit more complete look at the sliver to gold ratio story if you are interested: http://seekingalpha.com/article/206897-the-historical-gold-silver-ratio-and-why-it-s-time-to-buy-silver

leverton

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