Gold/Silver Ratio today
The gold/silver ratio indicates how many ounces of silver are needed to buy one ounce of gold. It is one of the oldest and most followed metrics among precious metals investors.
What is the gold/silver ratio?
The gold/silver ratio is simply the price of gold divided by the price of silver. If gold is trading at $2,000/oz and silver at $25/oz, the ratio is 80.
Historically, this ratio has fluctuated between 15 and 120. A high ratio suggests silver is "cheap" relative to gold, while a low ratio indicates silver is "expensive" by comparison.
How to use it for investing?
- Ratio > 80Silver potentially undervalued. Historically a good time to buy silver or swap gold for silver.
- Ratio 60-80Normal zone. No clear signal of overvaluation or undervaluation.
- Ratio < 60Gold potentially undervalued relative to silver. Consider increasing gold exposure.
Historical context
Historical average (50 years)
~60
Average ratio since 1970
All-time high
~127
March 2020 (COVID crisis)
Recent low
~31
April 2011 (silver rally)
Frequently asked questions about the gold/silver ratio
What is the gold/silver ratio?
The gold/silver ratio measures how many ounces of silver are needed to buy one ounce of gold. It is calculated by dividing the gold spot price by the silver spot price.
What does a high gold/silver ratio mean?
A ratio above 80 suggests silver may be undervalued relative to gold. Historically, ratios this high have preceded periods of silver outperformance. The long-term average is around 60-65.
How can investors use the gold/silver ratio?
Some investors swap between gold and silver based on the ratio: buying silver when the ratio is high (above 80) and swapping to gold when it drops below 60. This strategy aims to accumulate more ounces over time.