Gold vs. Silver

Gold vs. Silver
Trading Strategies
Mary Wild
Author:
Mary Wild
Published on: 23.06.2021 16:31 (UTC)
Post reading time: 2.35 min
169

 Every time people think of precious metals, first of all they come up with gold. Gold literally attracts people, whether in form of jewelry, industrial goods, etc. Moreover, this traces back to ancient times when all the religious icons were made of gold, wealth of kings were in gold and money was measured in terms of gold coins.

They say that gold will always be worth more than silver, the issue is their price ratio. Never in history had the price of silver per troy ounce exceeded the price of gold per troy ounce. The ratio shows how many ounces of silver one can buy with one ounce of gold. So, if a silver price is $30 and the gold price is $1500, the ratio will be 50. The latter can fluctuate. The fluctuation in XAUXAG means greater trading opportunities!

General overview on Gold vs. Silver disparity

Despite the fact that gold attracts more and more people, recently silver usage in industrial production has risen. Its demand has grown by one fifth over the last decade, which impacts the silver price. Some investors call it “the devil’s metal” as it moves much faster when markets are bullish. Analysts say that silver has no life of its own and it merely follows the direction of gold prices, but some historic XAUXAG charts show that silver has twice outpaced gold. There may be cases when investing in silver makes more sense than investing in gold. The difference between the prices of gold and silver is not persistent and changes depending on various factors. It is affected by the amount of mined silver, political problems and the general state of the global economy. It may be undoubtedly stated that gold is a rarer metal compared to silver. Generally, owning gold and silver can be a secure hedge against economic uncertainty.

Gold vs. Silver: XAUXAG trading

The XAUXAG trading instrument reflects the relationship between the dollar values of gold and silver. The XAUXAG instrument shows differences in the price dynamics, as well as the periods when they outperform each other. As mentioned above, the price fluctuations can bring great trading opportunities. Trend following strategies can be employed when price is in uptrend or downtrend. Even if XAUXAG is in the neutral trend, traders can make active investments in order to profit on price fluctuation in the range: buy near the support level and sell near resistance. XAUXAG trading opportunities can be identified on a XAUXAG chart, which shows the past price movements of the instrument, as well as help analysts build trading strategies for future movement dynamics.

Prices of gold and silver vary with changes in relative demand and changing level of global financial and geopolitical risks. Trading XAUXAG carries risks associated with trading financial instruments and care should be taken to control the risks appropriately. 

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