How the gold/silver ratio is calculated
The ratio divides the price of one troy ounce of gold by the price of one troy ounce of silver. Today gold trades at $4,140 and silver at $53.41, so $4,140 ÷ $53.41 = 77.51. In plain terms, you would need 77.5 ounces of silver to buy one ounce of gold. Because both metals are converted with the same exchange rate, the ratio is identical in dollars, euros, rupees or lira.
Where the ratio stands today
Over the last twelve months the ratio ranged from 46.0 to 81.5, averaging 65.3. Today's reading of 77.5 is above that one-year average, which means silver is currently cheaper relative to gold than it has typically been over the past year.
A short history
For centuries governments fixed the ratio in coinage law: the US Coinage Act of 1792 set it at 15:1. After the gold standard ended and both metals floated freely in the early 1970s, the ratio became a market price. It fell to about 17 in 1980 when silver spiked during the Hunt brothers' squeeze, rose near 100 in the early 1990s, dropped to around 32 in 2011 when silver approached $50, and set a modern record above 120 in March 2020. Since 1971 the long-run average has been roughly 60 to 70.
What drives the ratio
- Risk sentiment: in crises investors favor gold, pushing the ratio up.
- Industrial cycle: strong manufacturing and solar demand support silver and push the ratio down.
- Monetary policy: falling real rates tend to lift both metals, but silver usually rises faster in late-stage rallies.
- Supply: most silver is mined as a by-product of copper, lead and zinc, so supply reacts slowly to price.
How investors use it
Ratio traders hold one metal and switch when the ratio reaches extremes. For example, an investor with 1 ounce of gold at a ratio of 78 could swap it for about 78 ounces of silver. If the ratio later fell to 60, those ounces would buy back about 1.29 ounces of gold, without any change in the dollar price being required. The strategy does not tell you whether metals will rise or fall, and dealer spreads on each swap reduce the gain, so it suits long-term holders of physical metal best.
Tips
- Watch the ratio alongside the gold price today and the silver price today.
- Factor in silver's higher storage cost and wider retail premiums.
- Value your holdings with the precious metal calculators.
Live and historical data: MetalflowAPI. See our methodology.