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Due to easy availability in the recent past, the widely seen British gold sovereign (also commonly known as 'guinea'), has had the oldest history in India as being part of modern investment bullion portfolios.
The difference in quality of the design is easily seen when you compare this to the real coin issued by the British Royal Mint. The modern sovereign is of a standard weight of 7.98 grams of 22 carat gold containing actual gold of 7.315 grams. The most important bullion metal
This chart shows that over the past ten years gold and silver have appreciated more than 400% on a rupee basis. The interesting thing is that from 1998 to 2008 the gain was 200%. So in 2 years following, the gains have been huge. The interesting thing is that silver (yellow line) has had a greater volatility in price than that of gold (blue line) in times of economic uncertainty, from 2006-2010. The Gold to Silver Ratio Optimistic experts believe that the ratio would eventually approach 16. Historically, over centuries, that has been the most long-held stable gold to silver ratio. This was before government issued paper money of unknown worth became an acceptable substitute. Paper money is, of course, a fraud perpetrated by governments on the citizenry, first invented in the 17th century by John Law, a disreputable Scotsman with a very colorful history. You can read more about government paper funny money here (opens a new window). I do not know that this ratio will be achieved in a hurry. It might get there if there is a major collapse of world economies such as the collapse of the sub-prime housing market in the US, 2008 onwards. In any event, given the current depressed economic scenario worldwide, gold and silver continue to be superior assets. More so as paper money that has no real asset value backing it up, the paper currency continues to get shredded.
If we look at the chart below for the past 1 year (November 2009- November 2010), we find that the silver price (yellow line) has in fact been rising at a greater rate than that of gold (blue line).
In the past 1 year, the S & P CNX Nifty index for the stock markets has risen by 29%. In the same period gold has appreciated by 20% while silver is up by 55%. At 50, the gold-silver ratio is currently more favorable for buying gold compared to silver as silver is relatively more costly to buy at this ratio. (The G:S ratio is a calculation of how many units of silver it would take to buy 1 unit of gold at current prices. A G:S ratio means that at 50, it would take 50 grams of silver at to buy 1 gram of gold.)
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