THE SIlver-Gold RATIO
Because I get asked so much about this, I'll attempt to explain here what it is and what it isn't. Maybe the first thing I'll say, is.... what it isn't, then we'll move into what it is.
The Silver-Gold Ratio is not, a number of Silver ounces that you can exchange for 1 oz of Gold, or vise versa. How most come up with the Ratio, is to take the SPOT price of Gold, and divided it by the SPOT price of Silver. So if Gold SPOT was $6000 and Silver SPOT was $100, the RATIO would be described as Sixty to one, or 60:1. This does not mean if you bring 60 ounces of silver to a Gold/Silver Dealer, that you will walk out with 1 ounce of Gold. So to better understand why, here's what it really take to turn your Silver into Gold.
There are many facets of the Gold/Silver Business that are not understood by the general public, but any Commodities Dealer would function in the same manner. The main concept to understand here though, is that there is no such thing as TRADING, when dealing with commodities. In order for the business to function, any transaction must be treated as a separate transaction. So if you want to turn your Silver into Gold, what you will be doing is, Selling your Silver at the current Dealer's Pay Price, and you'll then be Purchasing an ounce of Gold, at the Dealer's Sell Price. Every Dealer will have a slightly different price-points for both of those transactions, but the actual "RATIO" for turning your Silver Bullion into Gold Bullion, will be something higher than simply using the SPOT prices of both metals.
You can find the current True Ratio for SILVERTIP at the bottom of our SELL Pricelist, both for converting Silver into Gold, and Gold into Silver. But to finish off the example transaction noted above, at the stated Spot Prices, we need to do the following calculation. With SPOT Gold at $6000, let's say with the current Premiums, and ounce of Gold is selling for $6175.00. And with SPOT Silver at $100, the current Sell-Back price on you Silver Coins is $98.00. All we need to do is, divide $6175.00 by $98.00, and this will give us the TRUE RATIO of turning your Silver into Gold. So in this case, 6175/98=63. If you bring in 63 Silver Coins, you will walk out with 1 ounce of Gold. So the TRUE RATIO on this would have been 63:1 not 60:1
AND.... to go one step further, because in the Investment World as far as taxes go with the CRA, if a transaction like this does occur, it is my understanding of the Tax Laws, that because you have sold your Silver, it is likely subject to triggering a Capital Gains event, and therefore, any profits or loses on the sale of your Silver, would likely need to be addressed with your accountant to see what the implications, if any, apply to your situation.
I hope this has answered your any questions you had about the Ratio Trading, and if you wish to go ahead with converting your Silver into Gold, or your Gold into Silver....I would be happy to arrange a meeting to get that done at your earliest convenience.