opinion

Why the gold-silver ratio doesn’t work the way you think

Kitco Media
By CPM Group
Published:
Updated:
Kitco Commentaries
Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Why the gold-silver ratio doesn’t work the way you think teaser image

In this presentation, Jeffrey Christian of CPM Group discusses the gold-silver ratio, one of the most widely referenced indicators in the precious metals markets. Many investors believe that the ratio between gold and silver prices should reflect either minable deposits or above ground inventories. Jeff explains why that assumption is incorrect, what actually determines the gold-silver ratio, and whether it is important.

The presentation then addresses misunderstandings about global silver inventories. Jeff reviews CPM Group’s long-term estimates of above-ground silver stocks and explains why reported exchange inventories represent only a small portion of the total amount of silver available in the market. He discusses the roles of bullion, coins, exchange inventories, and unreported holdings in shaping the overall supply picture.

Finally, the segment concludes with a look at some of the broader factors influencing silver prices, including economic conditions, political uncertainty, inflation, and seasonal investment demand. 

Kitco Media

CPM Group

CPM Group is a commodities research, consulting, financialadvisory and commodities management firm providing independent research,analysis and advisory services related to commodities markets, corporate andproject finance, and the financial management of exposure to commodity orientedinvestments.

We started our business in 1986 predicated on the idea that commoditiesresearch and advice is best delivered by independent experts who do not work forbanks, brokers, mining companies, or any other entity that has interests thatcould conflict with the best interests of the clients receiving the research,analysis, and advice.

All of our work is driven by fundamental commodities research and economicanalysis. As we undertake our research into individual commodities markets wegather a tremendous amount of information and develop an enormous body ofextremely high quality, unbiased analysis of the markets and the companies thatare involved with individual commodities. The outputs of our research andanalysis take the form of research reports, specialized and targeted consultingrelated to these markets, financial advisory services ranging from corporate andproject finance structuring to equity introductions, and managing specificcommodities and investment positions for clients.

CPM Group continues to demonstrate the economic value and financial worth ofsuperior research, information, and analysis. Our research is based onmicro-economic analysis of the individual components of each commodity market,wedded with a top-down macro-economic analysis of the global trends affectingthese markets. We apply the results of that analysis to our research,consulting, and advisory services.

Mdi Earth Logo

Tags:

silvergold-silver ratiostocksgoldpolitical uncertaintyinflation
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.