hey everyone welcome to bald guy money I've seen a lot of posts on both Twitter and YouTube lately talking about just how cheap gold is in relation to the stock market and although that is a fantastic metric to look at the Gold to Silver ratio suggests that gold is either more expensive than we think or that silver is severely undervalued so in this video I intend to settle the argument at least as it stands today because we are answering the following questions number one what is the best way to measure Gold's affordability


we've done this exercise for silver in a past video and now I have created a similar tool to the one for silver that gives us decisive answers on gold and I am going to take you through it number two what is the better deal in metals today is it silver or is it gold and this involves comparing the output from both of my tools and finally how will I split a five thousand dollars metal purchase between gold and silver versus a one hundred thousand dollar purchase there are fundamental differences to how


I would do it and I'm going to explain it all in this video just before we get into it I want to remind everyone who wants to leave a like to do so right now in support of my channel and of educational content like this and please don't forget to subscribe for more data driven videos just like this one and a big thank you to all my subscribers for your continued support So to start of course the main unit of measure I use to analyze the price of gold and silver is its spot price in US Dollars and by that


metric the price of gold has pulled back about seven percent from the 2023 high that we hit during one of the trading days in early may now instead of telling you I told you that we'd see something like this because I did I've been telling my patreon members to look for gold to dip below 1 950 since May but what I really want to say is especially to those of you who bought gold above two thousand dollars an ounce is this don't worry we'll get back up to two thousand seventy five dollars again it's


just a matter of time and we're still up almost six percent on the year and it's far from being over but as I demonstrated back back in February with silver relying on one Benchmark whether that be the US dollar the gold to Silver ratio or the S P 500 to gold ratio as a lot of Twitter analysts have been doing as of late one Benchmark is simply not enough It's never enough and it usually results in major misinterpretations due to Temporary disequilibriums or more simply put misinterpretations when the


market isn't behaving normally due to some external factors so that's why when I'm trying to determine whether gold is cheap or expensive I Benchmark it to these four things the first being housing and that's versus median house price in the United States the second is the price of oil the third is the price of sugar and the fourth is the value of the S P 500 Index and what I've done is I've pulled data from 1987 up to today to determine the average value of gold versus these benchmarks over that time


period And for those of you wondering I have excluded silver In the comparison because housing and the S P 500 are better benchmarks in determining the state of the broader economic landscape versus the price of gold which is not as driven by industrial demand as silver is but to be consistent I have also done the exact same analysis for silver to get an Apples to Apples comparison even though I am using my old methodology in practice for silver which benchmarks it to Gold oil and sugar and I'll link that


video up describing exactly how I do that at the end of this video but for those of you concerned about getting consistent results I want you to be sure that I have all the bases covered just before I reveal the results here is a reminder of what ratings I use to evaluate the price of metals relative to our benchmarks they are cheap neutral and expensive and everyone with access to this Excel tool which has an automatic update function to show the current price of gold and silver can of course use this


to help plan purchases better I am actively using this tool to help plan my purchases and you can see in the text Below in the rating descriptor exactly how I adjust my purchase tactics based on the output of the tool and when it comes to Gold you can see that at the beginning of the data set from 1987 to 1989 gold was quite expensive relative to our benchmarks but starting in 1992 something significant happened a shift occurred on the market because that's when central banks went on a selling


spree and with significant increases in the price of housing paired with the tech boom on the stock market which included the.com bubble if we return to our chart we see that at least according to my analysis gold remained cheap until 2007 which was right before the next fundamental shift for gold which pushed it back into the expensive range starting from 2009 which lines up exactly with when central banks started adding gold to their vaults again as a result according to my numbers gold remained relatively expensive all the


way until 2021 when yet another Factor shifted the landscape once again and this was a shift that has offset record gold buying by central banks pushing gold down again into the neutral zone in U.S dollar terms and that is the lagged impact of a massive M2 money supply expansion which has shocked the market this expansion has driven up the prices of homes the stock market and of food as measured by the presence of sugar in our analysis and what this tells me about the price of gold today is although it's


not as cheap as it was in that period from the mid 90s to the early 2000s the price of gold has not fully caught up to the money supply expansion that we experienced during c19 and considering the fact that central banks are stacking at record levels and that money supply expansion can't be undone because it would destroy the banking system which is already struggling under the weight of higher interest rates this tells me that we are in a very good place to purchase gold right now in fact based on extra


analysis available in my gold and silver price tool the 15-year Trend shows that gold is on the border between cheap and neutral right now with a similar affordability rating to when the price of gold was one thousand two hundred sixty nine dollars an ounce in 2018 but despite those fantastic numbers on gold and I think many of you expected this you simply can't beat how cheap silver is right now in fact when using the exact same benchmarks over the last 15 years as we use for gold so an Apples to


Apples can comparison you can see that silver has been cheaper over the last two years than it has been compared to any other period over the last 15 years and that takeout is more or less in line with the analysis that I did back in February of this year confirming that silver is the better deal in metals right now when you consider its price in relation to multiple key financial variables now that brings us to our third question because at the beginning of the video I told you all I would reveal how I would split a five thousand


dollar purchase of gold and silver versus a one hundred thousand dollar purchase and no matter what budget you're on right now I really want you to pay attention to this part of the video because it's all about upside potential versus pure wealth preservation because how I would invest five thousand dollars would be to focus on the real upside potential silver has versus gold considering of course how it is currently priced versus our Benchmark items of real estate oil sugar and the S P 500 that analysis once again confirms


something I've been talking about on this channel for years and that is the bigger upside potential silver has versus gold and with five thousand dollars to split up although a very significant amount of money my focus would be more on growing that figure over the long term since the five thousand dollars in itself isn't particularly life-changing that's why I would invest a little more than half of the money into silver at a ratio of 91 ounces of silver to one ounce of gold as you can see here in the image


but when talking about one hundred thousand dollars it's a totally different story that is money that can supplement a modest fixed income for many years and it's not money that you'll want tied to something whose value has many variables attached to it so with this I would focus more on wealth preservation with a split of 28 in silver to about 72 percent of the dollar value in gold at a ratio of roughly 28 ounces of silver for every one ounce of gold with two monster boxes of silver you'll hardly miss out on a


major run up in the price of silver but you can also sleep easy knowing that the majority of that one hundred thousand dollars is in something that central banks are all trying to get their hands on with all that said I would love to know what you think about my Approach in the comments section do you think I have it right or would you do something differently let me know right now I respond to all the comments I read all the comments I respond to all the comments and I want everybody out there


to know that this is a place for discussion and the exploration of ideas and please remember you can get access to my Excel tools that track the price of gold and silver versus our benchmarks in real time from the privacy of your own PC by joining my patreon when you join you also get access to 28 patreon exclusive videos plus one new video every week you get my weekly newsletters with price targets for Investments across the investing Spectrum as well as access to my patreon Discord where we talk about prepping


where to find good deals on Metals we talk about crypto and we even had our first voice call this past Sunday where we talked a bit about politics current events and firearms link to join is in the description of this video as well as the pinned comment you can cancel at any time and your membership there goes to support this Channel and help keep bald guy money sponsor free that's it for this video Everybody take care of yourselves and take care of each other and until the next time we see one another


goodbye