Gold is back in the headlines as investors clamor for cover in what has begun a broad market selloff. Silver’s value was recently less than 1/90th gold’s value. The historically low gold-silver ratio has market veterans Mike Maloney and Ronald-Peter Stoeferle bullish on silver and silver stocks.
Mike Maloney explains,
“I just can’t justify buying gold when silver is so incredibly undervalued compared to it.”
Incrementum highlights a chart that guides Mike Maloney’s latest discussion with Ronald-Peter Stoeferle, the Managing Partner at Incrementum.
The 50-year chart shows where the current ratio fits historically, as well as the gains silver experienced when the ratio fell.
Gold-Silver Ratio Still Favors Silver Buyers
Currently, as Ronald points out, the gold-silver ratio is at its highest level since 1991. And,
“This makes silver clearly a better buy than gold. And the metal that will see the biggest gains when the ratio reverses.”
Mike shares his buying strategy with listeners:
“The gold/silver ratio determines how I allocate my portfolio. And right now, silver is incredibly undervalued to gold, and gold is incredibly undervalued to everything else.”
The current gold to silver ratio or GSR is somewhere between 85 and 90. To calculate the GSR, find out how many silver ounces it costs to purchase one gold once. With silver at $18.60 and gold at $1,658, the ratio is around 89 or 90 to 1.
His channel summarizes Maloney’s sentiment,
“A day coming when the silver price spikes and pushes the GSR to 20. At that time, I will probably convert some silver to gold — and will get 4 times more gold!”
Clearly, Mike Maloney is waiting for a major move higher in silver prices and for the gold-silver ratio decline.