It?s never too late to invest in precious metals like gold and silver. Sharp and prompt increase in gold and silver prices has inspired thousands of investors across the world to invest in such metals to get significant return on investment. People who want to invest in gold and silver look for an accurate method to evaluate the rate of these metals. There are many ways to properly price these metals, but the most common one is to pricing through gold-silver price ratio. The prices of both gold and silver tend to correlate over time. Alternatively, it can be said that gold price and silver price normally tend to follow the same direction. By analyzing gold-silver price ratio, one can assume the coming trend of price of these metals to some extent.
Some useful tips
Here are some useful tips on determining the gold and silver prices. If you?re interested in investing your hard earned money in precious metals like gold and silver, you may follow these points.
- Search recent gold and silver spot prices ? To begin with, you need to find out the recent spot prices of both gold and silver. The spot price may be defined as the price of an ounce of the metal like silver and gold for prompt settlement. There are a number of websites that offer real-time spot prices for both gold and silver.
- Jot down the price ? Now jot down the price or simply cut and paste the spot prices of both the metal.
- Calculate the ratio ? Calculate the ratio of gold and silver prices using the sport prices. Consider gold price as the antecedent and the silver price as the consequent to find out the ratio.
- Reduce the ratio ? Try to reduce the ratio while planning to buy the metals as much as possible. For example, if the ratio of the metals is 1300/10, you can write it down as 130/1. The ratio denotes that the rate of gold is 130 times the rate of silver.
- Compare the ratio ? Now it?s time to comparing the ratio with the historical averages. There was time when the gold was traded at a price 15 times higher than the price of silver, i.e., the ratio was 15/1. If the present ratio of gold and silver prices is higher than this ratio, it can be said that the price of silver is much less in comparison to the price of gold. In other words, the price of gold is much higher in comparison to the silver price. The higher ratio may also indicate that a new price paradigm has been created.
Discussed above are the most effective steps towards determining the gold and silver prices.
Word of caution
While the prices of gold and silver tend to return to the usual patterns, you can hardly predict the exact time when the normal prices are attained. Like any investment, past performances don?t always predict the future result.
Investing in precious metals like gold and silver has always been profitable. Even during the economic recession while the prices of dollar, euro and all other currencies were falling, gold and silver prices tended to rise. And thus investors consider investing in gold and silver as a safe haven. Apart from good return, investing in such metals ensures very little to nil chance of loss.
Author?s Bio ? Sam has been in the investment sector for many years. Her write-ups related to gold and silver prices, buy gold, gold laws, gold news etc. are very popular amongst the investors.
Source: http://silverlininginvestments.info/tips-to-determine-the-gold-and-silver-prices-accurately.html
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