Gold Silver Chart Ratio Strategy: Rules and Backtest

The gold-silver chart ratio strategy is a technique for trading the two precious metals (silver and gold) using the relationship between their prices. The gold/silver ratio shows the number of silver ounces you would need to trade to receive the value of one ounce of gold at current market prices. It is a powerful trading signal that can help to identify buying or selling opportunities in the two precious metals.

We backtest the following trading rules:

• We use the RSI indicator to make an RSI indicator strategy of the gold silver ratio.

• When the 5-day RSI is above 75 we buy at the close.

• When the 5-day RSI falls below 50, we sell at the close.

This simple gold silver ratio strategy has not performed well on GLD (Shown in the image below)

We do another backtest Gold silver chart ratio strategy with a pair trade that shows a flat development. Check it here >>

https://www.quantifiedstrategies.com/gold-silver-chart-ratio-strategy/