The diviner of light and gravity, the father of calculus and creator of modern astronomy got his sums wrong when – after leaving academia to run England’s coinage as Master of the Mint at the Tower of London – he proposed a new price for gold Guineas in terms of silver shillings. There is thought to be around 16 times as much silver in the Earth’s crust than gold, leading some to argue that the ratio should also therefore be 16. Others believe the ratio should be even lower because […]

The emergence of personal computers made it easier to use technical analysis. Only these three things are enough for setting up the technical chart. As for the moving averages, the original concept used SMAs . Instead, it signals that the market (i.e., a currency pair) has entered into a bullish territory. And, from that moment on, traders should start looking for setups to go long. A death cross is created as an end to a bull trend due to long-term buyer exhaustion.
Moving averages with differ […]

Silver gets used, gold does not – all the gold that has ever been mined, pretty much, still exists somewhere. But silver, with its numerous industrial applications, gets consumed. And yet here we are with that ratio ten times higher – and silver ten times too cheap. According to my data, the gold-silver ratio has only ever gone above 100 once before. It didn’t happen in the financial crisis of 2008, the dotcom crash of 2000, or the Long Term Capital Management Fund Crisis of 1998.
In addi […]

The obvious difficulty with the trade is correctly identifying those “extreme” relative valuations between the metals. If the ratio hits 100 and you sell your gold for silver, then the ratio continues to expand, hovering for the next five years between 120 and 150, you’re stuck. A new trading precedent has apparently been set, and to trade back into gold during that period would mean a contraction in your metal holdings.

On the chart, I have marked the 70s bull market with po […]