Gold neutral

Gold-Silver Ratio fell below 80. Buy the first metal and sell the second with an expected yield of about 3%!

23 May 2024 157
Gold-Silver Ratio fell below 80. Buy the first metal and sell the second with an expected yield of about 3%!

Last Friday, May 17, the gold/silver ratio fell below 80.


As of today, there has been no significant change in the prices of both metals.

Gold-Silver Ratio fell below 80. Buy the first metal and sell the second with an expected yield of about 3%! - Photo 1

Gold-Silver Ratio fell below 80. Buy the first metal and sell the second with an expected yield of about 3%! - Photo 2


This means that there is still a chance to capitalize on the price ratio of the metals.


Our research titled "Gold/Silver Ratio (GSR): shall you check it out?" has shown the effectiveness of such a strategy.

In the period from March 2021 to March 2023, the total profitability of trading the gold to silver ratio amounted to about 100%, and the average return per trade was about 3%. The maximum drawdown did not exceed 5%.

Gold-Silver Ratio fell below 80. Buy the first metal and sell the second with an expected yield of about 3%! - Photo 3


A short video presenting this strategy can be found on our YouTube channel



In addition to the quite optimistic results of the research, it's worth paying attention to the fundamental factors that influence the precious metals markets.


The following facts act in favor of gold price growth:

- The escalation of the conflict in the Middle East and the resulting rise in geopolitical tensions. This is a positive factor for safe-haven assets such as gold.

- Strong investment demand from Chinese traders and organizations.

- Expected increase in the value of precious metals by 8% from the World Bank.

- Expectations of key rate cuts in the US.


The same factors are also partially favorable for the silver price, but to a lesser extent.

Silver is not particularly sought after as a safe-haven asset, but the metal is more important in industry. Rising tensions in the international arena threaten to put a damper on economies and silver demand.


What events and news are to watch out for while holding positions?

* Situation in the Middle East;

* Comments from the US Federal Reserve and its interest rate decision;

* Dynamics of the global economy and especially the Chinese data;

* Hedge fund interest towards gold and silver.



Trading plan


Buy gold and sell silver at current prices.

Hold positions until the ratio goes back to the level of 80 and stabilizes above it.


The expected profitability of the strategy is about 3%.

Since both metal markets are quite volatile, you should allocate no more than 2–3% of the available amount on your account for trading metals.



Make profits and have a good time!

This content is for informational purposes only and is not intended to be investing advice.

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