GSR and other ratios

[vand]

I don’t think there’s a dedicated thread for this, so starting one.

 

GSR has now moderated to about 76 as silver has been leading the climb in recent weeks. Silver still clearly a better buy above 72-73 imo. 

Gold/Plat levelled off at 1.46, currently 1.44. Platinum is outstanding at these generationally cheap levels for future outperformance.

 

[Pipers]

Are you talking vaulted and paper?

[HawkHybrid]

my limited research means I will unlikely be jumping on the

platinum bandwagon any time soon. so far my ideas are if

solar + better batteries makes electric vehicles more viable,

will that affect the demand for platinum? ratios hitting

extremes could be also be a sign that a trend is emerging/

changing.

 

HH

[sixgun]

Silver have been moving up and yesterday broke through and held above $17. Further rises today. We have seen this sort of action before so we will have to see but keep accumulating.

[vand]

The miners have been outperforming the metal during this recent decline. That is very unusual. Normally when gold gets a tonking the mining sector gets absolutely smashed, but in the last few weeks they have held up remarkably well... I would not be surprised if the mining sector is gearing up for a BIG move similar to H1 2016.

http://schrts.co/Ap9QSn

[HawkHybrid]

imo the miners are looking forward in production and prices.

spot price is just for that moment in time.

 

HH

[sixgun]

47 minutes ago, HawkHybrid said:

imo the miners are looking forward in production and prices.

spot price is just for that moment in time.

HH

Yes. Share prices to a large extent determined by future earnings. Some of the stock prices today are in la la land with PE ratios of 100's. These are justified on the basis that there will be large earnings growth in the future. If the view is over the next year or so the price of gold will appreciate, then this will be partially reflected in the share prices. The gold price is highly leveraged in mining stocks. Say a miner needs the gold price to be $1000 to make profit and the gold price is $1250. The miner makes $250 per ounce. If price went to $2500, that is a 100% increase in the gold price but the miner all things being equal now makes $1500 per ounce, that is a 8X increase in profits. Gold went up 100%, the miner's profits went up 800%.

If it is expected gold is at the lows and higher prices are in the pipeline you will see that in robust miners' pricings despite lackluster gold performance.

[vand]

GSR is now touching 85... people currently favouring gold are only seeing half the picture imo.

The data shows that you can be about as certain as is possible that silver will outperform gold over the next 10 years.

 

If GSR touches 88 I will sell my small holding of physical gold and buy more silver & platinum.

 

[vand]

At GSR 90, now is the time to SWAP your gold for silver if you really wish to play the ratio.

 

 

[HawkHybrid]

On 01/11/2018 at 11:09, vand said:

GSR is now touching 85.

 

On 01/11/2018 at 11:09, vand said:

If GSR touches 88 I will sell my small holding of physical gold

 

2 hours ago, vand said:

At GSR 90,

 

this is the problem, we know we should be

swapping to silver to make the most of the next

bull run but buying based on the gsr is no

better than randomly rolling the dice. anyone who

swapped gold for silver at a gsr of 85 will have

seen their silver holdings do pretty much nothing

during the last 6 months. the problem is that the

gsr does not provide enough insight to help

make buying decisions. it's only something that

physical silver sellers bring up to help convince

people that silver is cheap. as shown it doesn't

really help with timing.

 

HH

[sovereignsteve]

i'll stick with gold, but i'll hold a fair bit of silveras well, just in case

[DarkChameleon]

On 01/11/2018 at 07:09, vand said:

GSR is now touching 85... people currently favouring gold are only seeing half the picture imo.

The data shows that you can be about as certain as is possible that silver will outperform gold over the next 10 years.

 

If GSR touches 88 I will sell my small holding of physical gold and buy more silver & platinum.

 

So did you?.

[vand]

1 hour ago, DarkChameleon said:

So did you?.

Yes, although I didn't at 88 because it's a moving target. The model's current reading says swap boundary is 91, so I have begun swapping. 20% of my paper position. 

[HawkHybrid]

30 minutes ago, vand said:

The model's current reading says swap boundary is 91,

 

you're allowed to move the goal posts?

 

HH

[HawkHybrid]

50 minutes ago, vand said:

Yes, although I didn't at 88 because it's a moving target. The model's current reading says swap boundary is 91, so I have begun swapping. 20% of my paper position. 

 

Quote

The undisciplined trader usually makes the mistake of arguing with the market and doubling down on their position,

 

why are you doubling down if the market is not

going your way?

 

HH

[DarkChameleon]

I recall a certain silver collector what has spent hundreds of thousands buying silver with the intent to swap to gold when the ratio hits 40 to 1, he was buying like mad at 70 to 1...still will make money but nowhere as severe as the 70 to 1 ratio back then...if only he'd covered the spread of buying 70 to 1 as his stash grew.

[mdp2505]

I am also about to swap half of my paper Gold for paper Silver. 

Any silver bought at these levels will give a 20% increase in Gold at GSR 74 or 30% at 64, ignoring trading fees. Both very attainable levels in the not too distant future. Even if we do see 100:1 in the short term. At 100:1 I will even swap some physical gold for silver. 

It is an easy trade to accumulate more Gold. While precious metals don't pay a dividend, trading the ratios is a great way to let the volatility of the market work for you. Been waiting for this for a while!

[mdp2505]

Another useful graph from Belangp's YouTube channel: 

[vand]

15 hours ago, HawkHybrid said:

 

you're allowed to move the goal posts?

 

HH

The goal posts are set by a standard deviation multiple away from a moving average( a bit like bollanger bands); therefore as the market evolves and we see these high GSR levels for this length of time, the moving average will also move up.  I did model static goalposts at different levels, but the moving goalposts provided less frequent and cleaner signals over the length of the dataset, resulting in much better overall performance.

[vand]

1 hour ago, mdp2505 said:

I am also about to swap half of my paper Gold for paper Silver. 

Any silver bought at these levels will give a 20% increase in Gold at GSR 74 or 30% at 64, ignoring trading fees. Both very attainable levels in the not too distant future. Even if we do see 100:1 in the short term. At 100:1 I will even swap some physical gold for silver. 

It is an easy trade to accumulate more Gold. While precious metals don't pay a dividend, trading the ratios is a great way to let the volatility of the market work for you. Been waiting for this for a while!

Yes.. impossible to catch the top. That's why I am doing it in chunks. these things seem like a spike on the long term chart but actually play out over several months if you zoom in - in the early 1990s it too 14 months for the pattern to fully play out, with one brief spike to 100 lasting 1-2 months, but otherwise bumping around the 90 level for many months. 

It would not surprise me to see GSR 100+ again simply based on the way momentum is moving at the moment.. it will seem agonising for silver holders as they watch gold zoom, but silver will catch it's own rocketship sooner or later. 

[vand]

GSR getting oversold, but looks like it wants to test the 200dma at 85. I would expect some some reaction and bounceback if it pokes below the ~84 level. Still, well done if you've managed to swap some gold for silver in recent weeks. 

http://schrts.co/XREyfdSm

[Shinus73]

Small amounts, but I sold 5 Sovereigns and bought 100 1 oz silver rounds (first majestic) with the proceeds, an 85:1 ratio, which is pretty good considering the VAT associated with silver.

[vand]

GSR @85.6 has now broken the 200dma.. which hasn't actually been that significant in the last 3 years, as it simply acted as a support zone and then gone on to new highs.. but let's see what happens now and if this is the beginning of a change in the long term trend.

Platinum has been the biggest laggard in the sector, although it too has begun to catch up in the last couple of weeks.

[Au79]

The GSR line to watch breaking below is 86.5 🤩

[5huggy]

always have my on the "GSR" as well as actual individual PM prices