Last week we wrote about the gold to silver ratio. Our points were that it measures the price of one metal against the other, just as we use the dollars per ounce to measure daily metals prices, and just as we use ounces per Corvette to measure purchasing power preservation.
Also, we discussed the range of movement that silver has around gold over the past fifty years. We laid out notes for when to buy silver against gold, and when not to.
The Long Run Relationship Between Gold and Silver
Today we expand on the gold to silver relationship. Traditionally, gold moves first, with silver following but moving relatively more.
Since the 1970s, in all the big price moves studied, we find that although silver goes farther, gold leads the way by moving first.