In April 2011, silver prices reached 49.786 per troy ounce while gold/silver ratio was trading at 30.5.
When gold and silver began to fall, silver prices declined faster than other instruments as the division factor had broadened.
Traditionally, the division ratio of gold over silver has been trading at 50 factor as pivot point. The range of consolidation has threaded sideways from 40 to 60 as a trading band.
Fundamentally, the test of division ratio to the extremes will significantly mean a possible situation of oversold or overbought sentiments in the market.
Generally, when the division ratio goes beyond 40 or 60 levels, the factor will eventually narrow down with a simultaneously reversal trend in the aforementioned precious metals.
Moving forward, we propose to observe this gold/silver ratio chart as it is trading at 72 regions now. On its technical outlook, the chart pattern shows signs of declining soon in forthcoming 2Q. If this pattern materialises, we foresee the gold and silver will begin to run up soon.
The question is, how many ways to buy silver if you wish to take quick advantage in the bandwagon for bagging your profits? First, look into the trading spot silver using the leverage fund. Next, consider trading in the silver futures that are currently listed in many exchanges such as CME, TOCOM, Thailand, Hong Kong and others.One of the most efficient ways to decide whichever contract is suitable for you will be to base it on the face value of futures contract and daily trading volume in market.
For equity traders, favour buying in silver ETF for full capitalisation. Among all, two of the most highly traded ETF instruments in silver are iShares Silver Trust (NYSE: SLV) and Proshares Ultra Silver (NYSE: AGQ).
Out of many choices, you might also proceed to purchase some pure silver bullions or bars for own safekeeping. This is the most popular among many retail investors who always crave to hold some genuine products in their hands.
However, bear in mind that the highest value locked in the silver products are mainly those with purity .999 or .9999 fineness.
This year, the investment in gold and silver may yield higher returns due to the growing demands together with dollar as safe haven. Eurozone and the global economy have slowed down significantly due to the recent crude slump.
Follow the main trackers for wealth appreciation to avoid collision with bears in other market instruments. Good luck.
DAR Wong is a licensed Fund Manager in Singapore with 25 years of trading experiences in global financial markets. The expressions are solely his own. He can be reached at [email protected].