Comment: The gold/silver ratio isn't much of a predictor

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The gold/silver ratio isn't much of a predictor

For a good portion of history, prices of gold and silver and thus the price ratio were fixed by government edict. For the last 100 years or so, the price ratio has swung wildly.

I won't pretend to be able to predict future silver prices, but anyone who does needs to take a lot more into consideration than the gold/silver price ratio, such as the total present cost to mine an ounce of silver, predictions for future mining cost changes, how much supply is expected to be brought on-line or off-line, prediction of future industrial demand, how the value of the dollar itself may change, etc. It is really an impossible task, and anyone who can do so will be too busy profiting from trading the market to write a blog about silver prices.

There are some well informed people who estimate the total average cash cost to produce an ounce of silver to be around $20. That number by itself indicates to me that silver is not priced too high at present.

We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.

-C. S. Lewis