Gold/Silver Ratio
The number of silver ounces required to buy one ounce of gold — a measure of relative precious metal valuation that traders use to rotate between the two.
Formula
Gold/Silver Ratio = Gold Spot Price / Silver Spot Price
The Gold/Silver ratio divides the gold spot price by the silver spot price, yielding the number of silver ounces equivalent to one gold ounce. Historically (20th century average) the ratio hovered around 40–50x; since the 1990s it has averaged closer to 65–75x, with spikes above 100 during stress periods.
A high ratio (gold expensive relative to silver) historically favours buying silver (or a long silver/short gold spread), anticipating ratio mean reversion. A low ratio favours gold. This is not a mechanical trade — mean reversion can take years and requires patience.
During the March 2020 COVID crash, the ratio spiked to 124x — its highest in 5,000 years of recorded history — as safe-haven demand overwhelmingly favoured gold. Silver recovered strongly in the subsequent months as industrial demand returned.
Example
Gold trades at $2,380/oz; silver at $28.00/oz. Gold/Silver ratio = 85.0x. A trader believing this is elevated buys silver futures and sells gold futures in a ratio hedge, targeting a ratio return toward 70x.
Related Terms
Gold
The premier precious metal and safe-haven asset, priced in $/troy oz on COMEX and driven by real interest rates, dollar strength, and risk sentiment.
BeginnerPrecious Metals
Gold, silver, platinum, and palladium — rare, durable metals with monetary history and industrial uses, traded as safe-haven assets and inflation hedges.
BeginnerSafe-Haven Asset
An asset expected to retain or gain value during market turmoil — gold, US Treasuries, and the Swiss franc are the classic examples.
BeginnerSilver
A precious and industrial metal priced in $/troy oz on COMEX, with dual drivers: safe-haven demand and industrial demand (solar panels, electronics).
Intermediate