Understanding the gold silver ratio and how to change

Change the ratio of gold / silver – look for 15 – 35% of profits without spending money

The upward trend in metalworking has many investors owning both. But with gold and silver bars you can do more than just buy and keep. You can also periodically trade or “swap” one on top of the other. To do this successfully, you first need to understand the gold / silver ratio.

The gold / silver ratio indicates the number of ounces of silver needed to purchase one ounce of gold at a given time. If you study the prices of gold and silver that go back 4,000 years, you will discover:

  • The historical ratio is 16: 1 (to buy 1 ounce of gold it took 16 ounces of silver)

  • Over the past 100 years, the ratio has been 30: 1

  • Over the past 12 years, this ratio has kept closer to 60: 1

  • In the last 5 years alone, the ratio has ranged from 40 to almost 100

  • As of March 1, 2011, the gold / silver ratio was just below 40: 1

How can we take advantage of this fluctuation?

  • First – we calculate purchases based on the ratio. If the ratio is relatively high, we prefer silver when making new purchases. If the ratios are relatively low, we prefer gold.
  • The last – we act when the ratio reaches peaks and troughs. If the ratio is high, we will exchange gold for silver. Then, when the ratio drops, we will exchange the silver again for gold. In other words, we exchange silver for gold when silver rises faster than gold. We will then exchange gold for silver when silver becomes “cheap” relative to gold. Every time we go through this cycle – gold to silver and back to gold – we increase our ounces. This is the whole goal. For example:

    • Suppose you had one ounce of gold, and the gold / silver ratio rose to 80: 1. You would exchange your ounce of gold for 80 ounces of silver.

    • If the ratio dropped to 40: 1, you would exchange your 80 ounces of silver back for 2 ounces of gold, doubling the number of ounces you have.

  • Next – we buy a form of silver or gold, which allows for greater profits. During periods of high demand, investors often assign a premium to certain goods of 20 to 40% or more of their value. At this point, we can swap high premium items for others with lower levels – capturing most of the difference and turning that difference into extra ounces of metal.

In addition, the use of this technique does not require additional monetary costs. Taking advantage of this ratio strategy, you can defeat the alternative – to sit and wait for prices to rise.


  • Taxes – If you make a profit from the transaction, you can borrow income tax. We do not offer tax advice. Consult a tax professional.
  • Market risk – I do not determine the independent exchange of prices. Most likely, I am strongly inclined to other representatives of the industry, who have also been involved in technology for decades. The market may not cooperate. The challenge is to correctly identify exchange points based on relative estimates between metals. The ratio can move much higher or lower than our goal. Then we would have to wait longer for the ratio to adjust. This is a significant risk for those who trade ratios.
  • Costs – Transaction costs such as shipping, spreading the cost of offers and inquiries can be up to 8%, although they should be lower. We will need to trade long enough to offset transaction costs. Transaction costs associated with trading physical metals are higher than trading ETFs, futures or other paper instruments. To keep your costs low, we only charge half of our usual commission for a swap deal. Many others will take full commission from both the buying and selling side. Be careful.


  • More ounces free – A gold / silver trading strategy requires investments that would otherwise stagnate and create growth, increasing the number of ounces you have, at no extra monetary cost. From now until the end of the bull market, you should conservatively expect to double ounces using this strategy.

What you need to know

  • When I first started buying metals almost 20 years ago, my teacher often reminded me that he was not a prophet. In the same vein, if I’m wrong about the gold / silver ratio, it will cost you money. You buy silver instead of gold, and gold outstrips silver, or vice versa. I don’t think it will happen. Or, if so, it will be temporary. I have successfully deployed this strategy many times. Sometimes the time frame between swaps is relatively small – maybe just a few months. Other times it took two years or more.

  • I recommend exchanging silver for gold if the gold / silver ratio drops to 48 or less. Think about replacing more if the ratio goes down further. We will then look for an opportunity to exchange this gold back for silver by capturing this win in extra ounces of silver.

  • Because there are commissions and other transaction costs, you won’t understand exactly the same ratio as the spot ratio.

  • The exchange strategy works for both small and large investors until you are ready to exchange (150) ounces of silver and more. We will exchange for the cheapest, most affordable, most liquid gold coins – all that offers you the most gold for your silver.

  • This is not a petition, but only a strategy. Please do your own check and make your own investment decision.

  • After all, I prefer silver over gold because I’m still confident that the ratio will reach 16: 1 (or lower) at the top of this bullish market.


  • It is impossible to change the exact amount of one metal to the exact amount of another. For example, for an ounce of gold you can buy 50.17 ounces of silver, but never equal even for 50 ounces. I do my best to swap places as close to equal as possible. We will calculate the balances in cash. You can borrow a small amount, or you can borrow a small amount. I’m trying to keep those amounts under $ 100.

The ability to exchange gold / silver appears intermittently. If you want to learn more about how you can increase your metal stocks by 15-35% or more without spending money, contact us. The window of opportunity is very narrow.