Gold-Silver Ratio

The gold-silver ratio (GSR) is a straightforward figure: it divides the gold price by the silver price and therefore tells you how many ounces of silver equal the value of one ounce of gold. When the ratio sits at 80, an ounce of gold costs as much as 80 ounces of silver.

The calculation

Ratio  =  gold price per ounce  ÷  silver price per ounce

Because both prices refer to the same unit — the troy ounce — and are quoted in the same currency, the ratio is a dimensionless number. You can follow the current value together with a chart on the gold-silver ratio page.

What the number tells you

Historically the ratio has swung widely. Over recent decades it has mostly moved between roughly 50 and 90, with excursions above and below during extreme periods. Investors often read the ratio as a signal of relative value:

• High ratio (e.g. above 80): silver looks comparatively cheap against gold.
• Low ratio (e.g. below 50): gold appears cheaper relative to silver.

Some investors switch between the metals on the basis of the ratio — moving from gold into silver, for example, when the ratio stands historically high, in the hope of a later reversion to the mean. That is a strategy, not a guarantee: the ratio can linger in extreme territory for a long time.

Why silver moves more sharply

Silver is to a large degree an industrial metal and has a considerably smaller market than gold. That makes the silver price more sensitive to the economic cycle and shifts in demand — the ratio therefore often moves strongly during downturns and booms. Anyone wanting to check the current value of a specific silver holding can use the silver calculator; the long-run path of both metals is shown on the historical precious metal prices page.

In brief

The gold-silver ratio is a quick look at the balance of power between the two most important precious metals. It replaces no forecast, but it helps to place "expensive" and "cheap" in relative terms — and it shows why silver is regarded as the more volatile of the pair.