| Where Is the Gold-Silver Spread Headed? | |
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Gold Relaxes before the Fed's Rate Hike Verdict (Continued from Prior Part) Gold-silver ratio surges
With routing precious metals prices, gold’s falling, and silver’s losing 12.7% on a year-to-date basis in 2015, the gold-silver ratio is an important indicator of the relative price performances of the both crucial precious metals.
Also called the gold-silver spread, this indicator measures the number of ounces of silver it takes to buy a single ounce of gold. A higher spread means it takes more ounces of silver to buy a single ounce of gold. Currently, silver is becoming comparatively cheaper than gold. The rising ratio indicates strength for gold and weakness for silver. Below is a historical price chart of the gold-silver ratio.
Investors now have their eyes set on the performances of these two metals after the Fed gives its take on the rate lift. The gold-silver spread is currently trading at $77, which is about 3.2% above its 100-day moving average price of $74.62. A possible fall may be expected in the ratio.
Fundamental strength
As gold is famous for its store of value fundamental, silver is primarily viewed as an industrial metal. The fundamentals for gold may not stand as tall as silver due to the supply crunch in silver’s market.
The growing demand for silver in the solar energy industry gives it an added advantage. Gold is widely expected to lose more luster once the Fed raises interest rates above the zero level.
The fall in gold and silver has lead to carnage in the precious metals mining industry. ETFs such as the Market Vectors Junior Gold Miners ETF (GDXJ) and the Direxion Daily Gold Miners Bull 3X ETF (NUGT) have fallen 20.5% and 78.5%, respectively, on a year-to-date basis.
Mining companies that have also taken hits on their share prices include Eldorado Gold (EGO), IAMGOLD (IAG), and Silver Wheaton (SLW). These three companies contribute 9.8% to the price changes in the Market Vectors Gold Miners ETF (GDX).
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Silver Wheaton
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PRODUCER |
CODE : SLW.TO |
ISIN : CA8283361076 |
CUSIP : 828336107 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Silver Wheaton is based in Canada. Silver Wheaton produces silver, copper, gold, lead, silica and zinc in Canada, in Greece, in Mexico, in Peru, in Portugal and in Sweden, develops copper, gold, silver and zinc in Canada and in Chile, and holds various exploration projects in Argentina and in Portugal. Its main assets in production are ZINKGRUVAN in Sweden, KENO HILL (BELLEKENO) and MINTO MINE in Canada, SAN MARTIN - LUISMIN, PEÑASQUITO, LUISMIN and G-9 CAMPO MORADO in Mexico, YAULIYACU in Peru, STRATONI in Greece and NEVES-CORVO in Portugal, its main assets in development are PASCUA LAMA in Chile and KUTCHO CREEK in Canada and its main exploration properties are PROMOTORIO DURANGO and MONTOROS in Mexico, ALJUSTREL in Portugal and LOMA DE LA PLATA (NAVIDAD) in Argentina. Silver Wheaton is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 12.6 billions as of today (US$ 9.2 billions, € 8.4 billions). Its stock quote reached its lowest recent point on March 09, 2007 at CA$ 10.01, and its highest recent level on May 15, 2017 at CA$ 28.53. Silver Wheaton has 441 520 000 shares outstanding. |