The Silver To Gold Ratio

7 (121.65 ounces) and $5,000 worth of silver (1953 ounces). By 1973, Nixon had taken us off the gold standard. This allowed the price of gold to float in accordance with global demand. The silver to gold ratio rose from 16.12:1 in 1968 to 43.45:1 in 1973. The reason? In just 5 years (1968-1973) the gold price rose from $41.10 per ounce to $120.17 per ounce. At the same time, the silver price rose just slightly from $2.56 per ounce to $2.76. By 1973, the value of the original portfolio purchased had grown to about $20,000. A good return by any measure. Obviously, the temptation here is to hold and potentially double your money again over the next 5 years. But look at the opportunity. In 1968, 121.65 ounces of gold was equal in value to 1,953 ounces of silver. In 1973 that same 121.65 ounces of gold was now worth 5,285 ounces of silver. (121.65 x 43.45 = 5,285) So—knowing what happened, you’d make the gold-for- silver trade! When you do, you now have a total silver portfolio of 7,249 ounces. In 1968, had you initially invested the entire $10,000 into silver, you could only have bought 3,906 ounces. After you make your trade— Now Wait! By 1980, the ratio dropped to 18.7 close to its historical level of 16:1. Both metals were significantly higher in price in dollar terms. Had you not made the 1973 trade, and instead held the original 121.65 ounces of gold and 1953 ounces of silver, your portfolio would have been worth $150,423. But, because you traded your gold for silver and increased your silver holdings to 7,249 ounces, the new total value (dollar terms) of your portfolio is $257,919. So now ... make the silver-for-gold trade! If 18.7 ounces of silver is worth 1 ounce of gold, your 7,249 ounces of silver is now worth 387 ounces of gold. In 1968, had you invested your entire $10,000 into just gold, you could have purchased 243.3 ounces. Now you have 144 more. You see now how strategically timing your trades, in accordance with the AGAU formula, could multiply your wealth in terms of both metals holdings and dollar value. Use the AGAU Formula to Put Your Portfolio on the Gold Standard Notice from the chart, how at times the dollar value of your holdings may drop from one trade to the next, but the total number of ounces of metal in your portfolio continues to multiply. You can also compare the new dollar value of your portfolio after each trade to the dollar value if you originally adopted a buy and hold