Gold/silver ratio in gold trading
The gold/silver ratio is the gold price divided by the silver price: how many ounces of silver buy one ounce of gold; traders use it to compare the two metals.
Also called Gold-silver ratio, GSR, Mint ratio
The gold/silver ratio is the price of one troy ounce of gold divided by the price of one troy ounce of silver. If gold is $4,000 and silver is $50, the ratio is 80: it takes 80 ounces of silver to buy one ounce of gold. The ratio has ranged widely over the decades, and traders watch it as a measure of relative value between the two metals rather than as a predictor of either one.
How it applies to gold trading
Silver usually moves more than gold in percentage terms, so the ratio falls in precious-metal rallies (silver outperforms) and rises in sell-offs (silver underperforms). A rising ratio during a gold rally is a sign that the rally is driven by haven or central-bank demand rather than broad speculative interest; a falling ratio suggests risk appetite in metals. Some traders trade the ratio itself, long one metal and short the other, which removes most of the directional exposure to precious metals as a whole.
The ratio has no fixed fair value. Historical averages are often quoted, but the ratio has spent years far from them in both directions.
Our ratio tool shows the live value and its history, and the gold-versus-silver guide compares the two metals’ volatility, costs and drivers for traders choosing between them.
A common mistake
Buying silver because the ratio is “historically high” and expecting a quick reversion. The ratio can stay high for years, and a long silver position carries silver’s full volatility while waiting.
See also: Beta, Correlation, Troy ounce, Hedging.
Frequently asked questions
What is a normal gold/silver ratio?
There is no normal. The ratio has moved between roughly 30 and over 100 in the modern era, and it can stay at extremes for long periods. Our tool shows the current value and history.
How do I trade the gold/silver ratio?
A ratio trade is long one metal and short the other in equal dollar amounts, profiting if the ratio moves in the chosen direction regardless of overall metal prices. It carries its own risks and costs, including two spreads and two swaps.