A great way to play gold and silver together – MoneyWeek

Well,thetwo-yearhighwas73。

6timesinearly2009andthefive-yearhighwas83inlate2008。

Gobacktwentyyearsto1991andtheratiowasuparoundthe100mark。

Verylong-term(thinkthe1970s)theaverageismorelike15。

However,since1991ithastypicallybeenmuchhigheruparound50andvirtuallyneverbelow41whereitisnow。

Sothequestionis:areweheadedfora1970s-stylescenarioofrisingpricesandlowgrowth(stagflation)wheresilversvaluecouldbeexpectedtocarryonrisingrelativetogold?

Thatviewwouldseethegapbetweenthetwopricesgraduallynarrowandfavouralong-silver/short-goldspreadbet。

Orhassilversrecentsurgerunitscourse?

Ifso,ashort-silver/long-goldpairstradewillmakemoneyasthegapstartstowiden。

FormoreonthisfromMoneyWeeksresidentgoldmarketexpert,seeCouldgoldhit$1,500bytheendofMay?

Andremember:withapairstrade,bothmetalscancontinuetorisetogether(orfalltogether)butyoucanstillmakemoney。

Youarenotreallybeingbullishorbearishoneithermetalindependentlyhere。

Whatyouareinterestedinasapairstraderisthegapbetweenthetwoeithernarrowingorwidening。

Itsthat,nottheoveralldirectionofthetwometals,thatisthekeytomakingmoney。

Asever,itsbesttousestoplosses(guaranteedstops)whenspreadbettingvolatilecommodities。

Also,whenyouarerunningtwoparallelbetsyoushouldpickasmallbetsizeinitially。

Docheckwithyourbrokerwhattheirminimumticksizeistoo–inotherwords,areyoubetting£1forevery$1movementinthecommodityprice,orevery$0。

1movement?

Inthefirstinstancea$10changeinthegoldpricemakesyou£10(ignoringthespread)andinthelattercaseitmakesyou£100(since$10represents100ticksof$0。

1)。

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