Buy gold, they say – but how do you sell it?

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If you are unaware of the historical price relationship between gold and silver, then you are in the comfortable majority.

It is a disadvantage not to understand the ratio that the two precious metals have traded at in the past, as you are missing out on opportunity to make money when the ratio changes to one extreme or the other. In the paragraphs that follow, you will learn what the gold to silver ratio actually is, how this ratio has been defined in the past, how it fluctuated throughout history, how you can benefit and how to make money trading gold and silver from it, and where the ratio will likely go in the future.

You can how to make money trading gold and silver the gold to silver ratio in very simple terms. It is the number of ounce of silver that you have to trade to purchase one ounce of gold. This ratio freely floats these days with both gold and silver prices determined ostensibly by market forces. In the past, this was not how the ratio worked. At various points in history, the ratio was defined and fixed by imperial decree as governments sought out a stable money supply.

In days gone by, this gold to silver ratio was defined by governments who looked at the physical supply. While there were a few times and places where silver was actually rarer than gold, gold has generally been considered to be the rarer of the two precious metals. When imperial governments saw that silver supplies were twelve times more plentiful than gold, then they would set a gold to silver ratio of You might be surprised how clearly defined the gold silver ratio has been since even before the time of Christ.

When Alexander the Great died in B. During how to make money trading gold and silver long lived Roman Empire, this ratio was 12 silver ounces to 1 gold ounce.

At the peak of the British Empire near the conclusion of the s, the imperial government in London decided to end the long time ratio of 15 silver to gold ounces. They de-monetized silver to gold at this point, as they simply did not have any silver on hand anymore.

The gold silver ratio continued to exist, moved generally by market forces from the s forward. By the year at the end of the last gold and silver bull market, the gold to silver ratio was As silver hit its lows inthis ratio blew out to an astonishing all time high of silver ounces for each ounce of gold.

In November ofit sits at approximately This represents an improvement on the gold silver ratio of the Great Recession and financial collapse, when the number temporarily increased to 80 silver ounces to 1 gold ounce. For how to make money trading gold and silver of you who believe that you should build up solid gold and silver holdings, you can employ this ratio very wisely to increase your precious metals assets.

What you must do is to switch back and forth between gold and silver based on whether the gold to silver ratio is historically high or low. As an example, if you owned a single ounce of gold and the ratio rose to the life time high ofthen you would sell your one ounce of gold to acquire ounces of silver.

Then you would wait patiently for the ratio to drop back down towards a more typical ratio of 50 silver to gold ounces, so that you could trade in your silver ounces for 2 gold ounces. In this way, you would trade back and forth whenever the ratio became too biased to one side or the other so that you could constantly increase your precious metals holdings and maximize them whenever possible. It would not especially matter to you how high the dollar value of either gold or silver was in this strategy.

If history continues to be the reliable indicator that it has been in the past, then you can make some predictions on the future moves of the gold to silver ratio based on what we have seen.

In recessions, silver tends to drop faster than gold, since silver has far more industrial applications than does gold. Though most people are unaware of this historical gold silver ratio, you can make a great amount how to make money trading gold and silver money when you how to make money trading gold and silver how to read and utilize it effectively.

There are many well proven and established strategies that allow you to predict the future price moves up of silver when the ratio gets unnaturally high, as from 80 to These strategies are reinforced if you hold to the idea that governments will continue to devalue their currencies as they print more paper money out of nothing, that chaos and instability in the world economy will only get worse before they get better, and that the sovereign debt crisis has not yet played out fully.

One way that you can play this ratio to turn profits is to invest in Exchange Traded Funds for Gold and Silver. With these Exchange Traded Funds, you can simply trade the gold to silver ratio at very little cost and overhead. You do not have to store precious metals in your wall safe or at your local bank in a safe deposit box. All that you have to do is to establish an account with a discount online brokerage like TDAmeritrade, eTrade, Interactive Brokers, or Charles Schwab, as a few options.

Then when the gold silver ratio climbs unnaturally high, you can purchase SLV. As silver rises to catch up with gold, your positions on the gray metal will gain in value.

When it is time to sell your SLV as the ratio normalizes back down towards or below 50, then it will only cost you a few dollars in commission to close out your position and take your profits.

As the ratio for gold how to make money trading gold and silver rise to an unusually high level, then you can sell some how to make money trading gold and silver and add silver to your account. Then when this ratio declines to a more typical number, you can sell some silver and instead add to your gold positions.

This way, you are not committed entirely to either silver or gold as you trade the gold silver ratio. What a great book for me! It begins slowly, giving me the background of what I need to begin systematically investing in silver. I really enjoyed this book by Thomas. I think the content was very educational and can help someone who would like to invest in silver.

The book was easy to grasp and very basic for a beginner like how to make money trading gold and silver who would like to invest in silver and build wealth. Enjoy this book and tell all your peers and family member s like I did with mine. You are doing them all a favor to help them build a path to success. Building Wealth with Silver is a must-read for anyone who is serious about intelligently making a potential fortune through investing.

It is one of the most thorough and well-explained investment books I have read and offers far more than what is suggested in its title. Not only did it over-deliver on its promise of a formula for making a fortune by investing in silver, but it also managed to open my mind and look at the world of money and investing in a way that created a huge shift in my understanding.

Gold silver ratio for the years — Gold silver ratio from — Protect your money from currency inflation…. The End for Risky Assets and U. Free Bonus — Limited Time Only! Simply email me your amazon receipt and I will send you this book set.

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An investment in metals will require a little capital to get started, and as with all things, the more you have to invest the more money you will make. Why trade precious metals? There are several good reasons to trade precious metals, the first of which is ease of access. Most decent sized cities will have a pawn shop, a jewellers or some form of direct metal buying and selling facility, such as a mint, which will enable you to trade metals. There are also countless websites which can deliver to your door.

This ease of access is a big factor when considering why you should get into the game. The second reason is liquidity. For you financial rocket scientists reading that means the ability to liquidate your investment back into hard cash. The third reason I like this game is that the investment can drop, but unlike stocks it can virtually never go to zero.

How to get started: Again, there are multiple ways to do this. Option two is to buy silver certificates from a brokerage. Your certificate proves you own X amount and can claim it at any time. I prefer to maximize profits and avoid fees where I can in any investment. This is where a company holds a massive amount of silver or gold and will sell you an ounce in the same way a company sells you a share. When deciding to trade with ETFs you need to properly educate yourself about how they work and make sure you understand the fees and charges each one will take.

If you get a reasonably priced one this can be an excellent way to quickly access the markets. There are pros and cons to each and it really also depends on how much you have to invest and what metal you want to buy. The major factors that causes metal market movements: There are several things which affect the price of precious metals. Gold is generally thought of as a safe haven in times of crisis and a hedge against inflation.

Because of its value as a safe haven one of the single biggest factors which cause the price of gold to go up or down is the mood of the investors in the market. In times of fear and crisis gold will shoot through the roof as everyone cashes out of stocks and bonds and buys gold bullion to secure their wealth. Likewise, in times of prosperity when the market is booming and everyone is buying stocks like right now the price of gold falls as investors sell the metal to obtain cash to buy stocks.

Just not yet as I believe it will fall yet further as market mania takes over before the inevitable crash.

For me the inevitable crash is one of the absolute greatest reasons to buy gold when prices are low: Silver on the other hand is an industrial metal.

Even if it takes a couple of years it will make me a tidy little profit. What if it falls yet further? The worlds greatest investor Warren Buffet not long ago bought a third of the worlds silver supply. As always, supply and demand rules the roost when it comes to trading commodities like metals. Trading metals is easy, passive cash. So whether you decide to trade gold or silver you stand to make great money. Things can take a little while to go the way you want. Patience and long-term thinking are key in this game.

G The gold to silver ratio is running about It's perfect timing to buy silver. When the ratio drops, it will be a prime time to trade for gold. I hadn't considered this but it is a great point! I'm buying as much silver as possible. Even if it doesn't go as high as you say it will at least double.

That's good enough for me! I checked it out. It's a decent site and I'll be keeping an eye on it. He was so far wrong about USO, but there's still a week left to be proven right. No gym, no problem! Great post in an exciting investing market. Interesting Jeff, I hadn't considered this but it is a great point! For a full rundown on gold and silver trading, check out thepropervillains.

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