{"id":6018,"date":"2022-05-20T13:03:02","date_gmt":"2022-05-20T09:03:02","guid":{"rendered":"http:\/\/gccexchange.com\/blog\/?p=6018"},"modified":"2022-05-20T13:03:43","modified_gmt":"2022-05-20T09:03:43","slug":"when-should-you-buy-silver-and-gold-in-uae-in-2022","status":"publish","type":"post","link":"https:\/\/gccexchange.com\/blog\/when-should-you-buy-silver-and-gold-in-uae-in-2022\/","title":{"rendered":"When Should You Buy Silver and Gold in UAE in 2022?"},"content":{"rendered":"\n

Investing\nin precious metals can present tremendous opportunities if pursued wisely.\nInvestors have long used gold as a form of “natural insurance,”\npreserving wealth during times of inflation or when political, military, or\neconomic risks arise. And silver, which can operate like a hybrid of an\nindustrial metal and a precious one, will often gain when gold does, and\nlikewise, increase in price when industrial output runs high.<\/p>\n\n\n\n

But there is also a way to find profit in the relationship between the silver rate and gold rate in UAE today<\/strong><\/a>.<\/p>\n\n\n\n

For the\nhard-asset enthusiast, the gold-silver ratio<\/strong> is common parlance. For the\naverage investor, it represents an arcane metric that is anything but\nwell-known. The fact is, that a substantial profit potential exists in some\nestablished strategies that rely on this ratio. <\/p>\n\n\n\n

The\ngold\/silver ratio is the amount of silver needed to buy an ounce of gold. The\nrelationship is used by many precious metal investors and gold traders as a\nfundamental indicator for determining the best time to buy or sell.<\/p>\n\n\n\n

If the\ngold-silver ratio is high, it means that it is the right time to buy silver,\nsince the ratio is more favourable to silver. For example, assuming a\ngold-silver ratio of 50 to 1, investors would have to only part with 1 ounce of\ngold to acquire 50 ounces of silver. Similarly, when the ratio is lower, it\nmeans that the gold price has fallen, and it is therefore time to invest.\nPrecious metal traders can use this ratio to diversify their trading\nportfolios.<\/p>\n\n\n\n

What is the average gold\/silver\nratio?<\/h2>\n\n\n\n

In the\nmodern era, the average price ratio between the two precious metals stands at\naround 55:1, as it was also at the beginning of 2020. The highest level ever\nrecorded was in 1990 and the lowest in 1979. Historically, when the ratio is\nbelow its average level, silver is considered cheap compared to gold; on the\nother hand, when the ratio surpasses its average, silver is considered\nexpensive.<\/p>\n\n\n\n

The\nchart below shows the price fluctuations of the gold\/silver ratio\nbetween 1913-2021.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n


\nSource: Bullion Vault via US Mint<\/p>\n\n\n\n

Throughout 2020, the risk aversion tendency in the markets of all asset classes has pushed the price of silver to its lowest level since 2009, causing it to fall below $12 per ounce, which has sent the gold\/silver ratio<\/a> to a new all-time high.<\/p>\n\n\n\n

How to Trade the Gold-Silver\nRatio<\/h2>\n\n\n\n

Trading the gold-silver ratio is an activity primarily undertaken by hard-asset enthusiasts often called gold bugs<\/a>. Why? Because the trade is predicated on accumulating greater quantities of metal rather than increasing dollar-value profits. Sound confusing? Let’s look at an example.<\/p>\n\n\n\n

The\nessence of trading the gold-silver ratio is to switch holdings when the ratio\nswings to historically determined extremes. So:<\/p>\n\n\n\n