Gold-Silver Ratio
Definition
The gold-silver ratio is the number of ounces of silver it takes to buy one ounce of gold. It is a simple gauge of the two metals’ relative value.
You calculate it by dividing the gold price by the silver price, both per troy ounce.
Why it matters
The ratio gives a quick read on whether silver looks cheap or expensive relative to gold. A high ratio means gold is dear compared with silver; a low ratio means silver has gained ground. Some investors watch it to decide which metal to add, though it is a rough signal, not a timing rule.
Example
If gold trades at roughly 80 times the price of silver, the ratio is about 80. That figure shifts daily as both prices move, and it has ranged widely across history rather than holding any fixed level.
Common confusion
A high or low ratio does not guarantee a reversal. The relationship can stay stretched for long stretches, and silver tends to be more volatile than gold, so the ratio can move sharply in either direction.