The Gold-Silver Ratio (GSR), which reflects the amount of silver its takes to purchase one ounce of gold, has completely reversed over the last six months. But that's not the full story...
The GSR fluctuates depending on the current value of gold and silver. If you’re looking to invest in either precious metal, monitoring the GSR for its highs and lows could impact your investment significantly.
Right now, the GSR is just below 50, which means it takes approximately 50 ounces of silver to buy one ounce of gold.
Historically, when the GSR drops into a range from 35 to 50, there is commonly a rapid surge in silver selling. At those times, when the GSR is at its low point, the price of gold is cheap compared to silver.
In April 2011, for example, the ratio plummeted to a low of 32.4! At this ratio, silver was selling for $48 per ounce and gold for $1,500 per ounce.
The ratio took an even larger plunge in 1980, when it dropped to around 18!
At those prices, it’s easy to see why investors were eager to sell silver.
We're seeing a lot of liquidations on the retail side today.
Despite the fact that GSR has fallen quickly over the past few months as gold and silver spot prices are regularly making new all-time highs, both gold and silver are still incredible buys right now.
Generally, silver tends to be more volatile than gold, thus resulting in comparatively larger moves up and down when market forces are active. In the last bull market, silver realized overall gains of 1000% from lows to highs while gold hit 600% at its peak.
On the whole, silver usually follows the movements of gold; however, it will occasionally gain strength on gold due to its numerous industrial uses. More importantly, silver trade is a much thinner market than gold. So, the same dollar has a bigger impact in the silver market than it does in the gold market.
In a bull market, silver follows gold on the way up, but silver is now rapidly outpacing gold as they both move the same direction.
Unprecedented Highs
In March of 2020, gold prices skyrocketed as investors flocked to the yellow metal as a safe haven during pandemic-related market volatility. Both gold and silver spot prices dropped initially as the stock market plummeted and investors sold off precious metals to meet margin calls. However, silver did not see the same recovery as gold, so when gold spot prices rose and silver spot prices remained low, the gap widened significantly.
The gold/silver ratio increased to over 127 to 1 on March 18, 2020, well above its former all-time high. Arguably, the gold/silver ratio at that time was the highest it has been in over 5,000 years; literally since the emergence of gold and silver as tradeable commodities.
From 2018 to early 2025, the GSR had been historically high, and after peaking at 125, it continued to hold around the 80-85 level for several years.
This is unusual.
You see, typically the GSR responds to extreme highs by correcting downward. This is the result of silver outpacing gold as both gold and silver prices rise from the lows.
But it took until mid-2025 for silver to break out, not only catching up to gold, but far surpassing it in terms of annual gains. Last year, silver moved up by 141% as gold rose by 64% over the same period.
Incredible.
Has the Bull Market Peaked?
A GSR held for years at unprecedented historical highs is a likely indicator that the GSR's bottom is far away. After all, if the GSR hit 18 to 1 in 1980, we could be looking at an even lower low as the current bull market performance seems to reflect the extremes—gold and silver's 2025 performance is the best annual performance since 1979.
So, is a GSR below 50 signaling signs of a top?
Not in this case.
The GSR is only one indicator of the length of a bull market.
The narrowing of the GSR can help investors and analysts to monitor the trends in a market cycle, but this bull market shows signs of continued long-term strength based on a multitude of other factors. Silver in particular has a number of non-monetary factors that are set to drive price action for years to come.
Here's what will continue to drive gold and silver prices up for years to come:
Anticipated future interest rate cuts
Chinese export restrictions on silver
Rising industrial demand for silver, such as AI data centers
5+ year silver mining supply deficit
The GSR is still worth tracking, but none of the other key technical indicators are showing signs of a peak. The precious metals bull market looks set to charge forward for years to come...
So don't get left behind.
How Can I Invest Using the GSR?
Most investors are driven by three principles when choosing to invest based on the GSR:
Taking action is especially important now as we advance further into this precious metal bull market. Whether you choose gold or silver, we have two helpful tips you can consider before making your investment…
If insurance is your prime motivator, buy both gold and silver… but weight your purchase toward gold.
If profit is your prime motivator, buy both gold and silver… but weight your purchase in favor of silver.
Give us a call today at 800-831-0007 to take action, or visit www.assetstrategies.com to buy gold and silver bullion direct online.