Gold/silver ratio

For those of you unfamiliar with the gold/silver ratio it measures the relative strength of gold versus silver prices. It shows how many ounces of silver it takes to purchase one ounce of gold. To get this number, you divide the current gold price by the current silver price. When you have done this you now have the gold/silver ratio. It is a simple way to see which of the two metals is gaining value relative to the other.

This means that whenever the gold/silver ratio rises it means that gold has become more expensive in comparison to silver. Take a look at the gold/silver ratio chart below:

Gold/silver ratio
With gold set to break out of its recent range with the USD expected to weaken, gold backed etf's gaining week after week , and private banks encouraging high net worth individuals to allocate gold into their portfolios the case for gold and silver longs is looking strong. Gold has been an attractive hedge during the last few recessions:


Expect silver buyers at market and on breakout of the ascending silver trendline. Although the gold/silver ratio has fallen from recent highs - silver still looks good value.