GSR – Is Silver about to pounce?

The GSR (Gold to Silver ratio) is often used to gauge the relative strength of both gold and silver at any one time.

Currently the GSR is sitting around 85, where generally the average GSR since 1970 sits at 54. In 2011 during Silver pricing peaks the GSR hit 31.

Over the past year, we’ve seen Silver somewhat languish compared to the performance of Gold. As a primary hedge, it is no wonder that Gold has outperformed during this period of high inflation, but historically at some point Silver catches up – and catches up fast.

As a precious metal, Silver plays more than one role. It is also an extremely important mineral for use in solar technology, super conductors and a myriad of industrial applications. While Gold may have lustre, Silver is actually more conductive than its yellow brother (it just naturally struggles with oxidation). 

And while many wonder ‘where does the GSR actually come from?’. Great question. Geologists figure that the ratio of gold to silver in the earth’s crust is 20.  For every 20 ounces of silver there is 1 ounce of gold. So the GSR isn’t a made up ratio, but based on modelled mineral deposits on earth. 

But as finding both gold and silver becomes harder and harder into the future, as we need to dig deeper and deeper into the Earth’s crust, we may well start seeing even more use for Silver. As it is more abundant, this means it is more accessible to mine. With more industrial applications appearing for Silver every year, its future as a quasi precious metal and commodity looks bright. 

Enjoy today’s charts and technical indicators.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA 

ASX200, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis a Buy signal.

Technical indicators – Monthly Projections

 Summary for Monthly Forecast: Strong Buy

*Not financial advice, please do your own research prior to any investment decisions you make.