The gold-to-silver ratio (GSR) measures how many ounces of silver it takes to purchase one ounce of gold. This ratio has been tracked for centuries and is one of the most watched metrics in precious metals trading. Calculate it by dividing the gold price by the silver price.
Why is this ratio important?
Historically, the ratio has averaged around 60:1, but it has ranged from 15:1 in 1980 to over 120:1 during the 2020 pandemic. A high ratio (above 80) often suggests silver is undervalued relative to gold, while a low ratio (below 50) may indicate silver is relatively expensive. Many precious metals investors use this ratio to time their purchases and decide between gold and silver.