Gold - Silver Ratio -

Gold - Silver Ratio

The Gold-Silver Ratio shows how many ounces of silver are required to buy one ounce of gold. For instance, the gold to silver ratio would be 76 if gold were selling at £950 and silver were valued at £12.50. The link between the two main investment metals may be usefully examined through the gold-to-silver ratio, which may also indicate future movement for the metals.

Investors may determine how many ounces of silver would be needed to equal one ounce of gold by utilising the most recent Gold to Silver ratio charts. According to this reasoning, gold is undervalued when the ratio is narrower and silver is undervalued when it is wider. Although it is only a rough estimate, investors continue to use the gold-to-silver ratio to piece together other statistics, such as demand and mining volume, to determine if either commodity may be ready for a price increase.

When the ratio is comfortably above 80, it indicates that the timing may be perfect to buy silver. The average range of gold to silver is between 50 and 70.

Throughout history the ratio has fluctuated widely.

  • In 2020 the ratio peaked at 123.5
  • At the peak of the last precious metals boom in 1980 the ratio had narrowed to 17
  • At the end of the 19th century the ratio was fixed at 15
  • During the Roman Empire the ratio was fixed at 12
  • 323 B.C. at the time of Alexander the Great's death the ratio stood at 12.5

Many investors in silver believe the ratio should stand at 16:1, primarily because there is 16 times more silver in the Earth’s crust than gold.

Many argue that the ratio could fall further because only 9 times more silver is currently being mined globally than gold. Others point to the fact there is 160,000 tonnes of gold above ground whilst most of the silver ever mined has been used up in industrial processes.

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