What is a gold & silver ratio?

The gold & silver ratio can be used as an indicator to look out for changes in the gold and silver markets. Investors often use this ratio to help them accumulate more gold or silver, selling one to buy the other. What is the Gold/Silver Ratio? The gold/silver ratio is simply the amount of silver it takes to purchase one ounce of gold.

What is a gold-to-silver ratio?

The resulting ratio indicates how many ounces of silver are needed to purchase one ounce of gold. The gold-to-silver ratio is primarily used as a tool by investors and traders to evaluate the relative value between gold and silver.

How many ounces of silver can you buy a ounce of gold?

If the ratio is 25 to 1, that means, at the current price, you could use 25 ounces of silver to buy one ounce of gold. 25 to 1 would be considered a narrow ratio. A narrow ratio indicates that silver’s relative value is up and a wide ratio indicates that gold’s relative value is up.

Should you buy silver or gold?

When the ratio is high, the general consensus is that silver is favored. This is because, relative to the ratio, silver is somewhat cheap. Conversely, a low ratio tends to favor gold and may be a signal it’s a good time to buy the yellow metal. Many large-scale, experienced investors may trade their silver for gold as the ratio drops.