There are so many times when people will ask me if they should buy gold or silver. Historically, the best way to tell if gold is a better buy than silver is to take the spot price of gold and divide it by 60 (gold price/60). If the price of silver is less than that calculation, silver is the better deal at the time. If silver is trading higher than the sum of that calculation then it is expensive.
By The Numbers
Currently, the price of gold is trading at $1257 an ounce. So if you divide the current price of gold ($1257) by 60 you get $20.95. Today, the spot price of silver is $20.40 an ounce, so silver is the better deal than gold at this time. Traders should note that this formula is used by most professional traders, so it is a good idea to adopt it. As far as the charts are concerned, the patterns between gold and silver look very similar. Silver also has high industrial demand because it is a lot less expensive, so traders may want to follow the new uses for silver as well.