Gold-Silver Ratio

The gold-silver ratio (GSR) is a simple metric: it divides the gold price by the silver price and thereby tells you how many ounces of silver equal the value of one ounce of gold. If the ratio stands at 80, one 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. The current value together with a chart can be found on the Gold-Silver Ratio page.

What the Number Tells You

Historically the ratio has fluctuated widely. Over recent decades it has mostly ranged between about 50 and 90, with swings above and below in extreme phases. Investors like to read the ratio as an indication of relative valuation:

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

Some investors switch between the metals based on the ratio – for example from gold into silver when the ratio is historically high, in the expectation of a later return to the mean. This is a strategy, not a guarantee: the ratio can remain in extreme ranges for a long time.

Why Silver Fluctuates More

Silver is to a large extent an industrial metal and has a considerably smaller market than gold. As a result the silver price reacts more sensitively to the economy and shifts in demand – the ratio often moves sharply in crises and booms. Anyone wishing to check the performance of a specific silver holding can use the Silver Calculator; the long-term trajectory 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 classify expensive and cheap in relative terms – and makes visible why silver is regarded as the "livelier" of the two metals.