Gold-Silver Ratio
2020 shook many of us awake to just how fragile our financial system really is. What once seemed rock-solid now feels more like a house of cards, with prices going up every day and our money not stretching as far as it used to.
Many have now turned back to gold and silver, but like any asset, they wrestle with the same questions:
When is the best time to buy? and Am I too late?
When it comes to purchasing any asset, it’s always best to leave emotion out of it; however, that can be extremely challenging to do. Let’s take a look at a timeless tool that can help us discern value, timing, and opportunity.
The Gold-Silver Ratio
What is the Gold-Silver Ratio?
The gold-silver ratio indicates the number of ounces of silver required to purchase one ounce of gold.
Example: If gold is $2,000/oz and silver is $25/oz, the gold-to-silver ratio would be 80, as it would take 80 ounces of silver to purchase 1 ounce of gold.
What is the historical average?
The historical average over the last century is around 50-70, so a gold-to-silver ratio of 80 would indicate that silver is undervalued compared to gold. This would mean that silver would potentially be a better purchase, as you would be getting more metal for your money.
As of the timing of this article (October 2025), the ratio stands at a little over 80. Translation? Even with silver nearing all-time highs, silver is still technically considered to be “on sale.”
Gold-Silver Ratio Interpretation Chart
Interpretation - When is the best time to buy gold or silver?
High Ratio (70+): Silver is considered to be relatively cheaper. This is often a good time to accumulate silver, especially if you believe the ratio will revert to its historical average.
When the ratio returns to the historical average or below, many will then trade their silver for gold.
Historical Average (50-70): Neither metal is considered to be overvalued or undervalued. During this time, purchase metals you like best and have room to store.
Low Ratio (–50): Gold may be the better value. This may also be a good time to use your silver to purchase more gold.
When deciding whether to purchase gold or silver, several factors should be considered, including storage, security, and practicality. However, the gold-silver ratio stands out as a valuable tool to enrich your decision-making. This ratio can help serve as a compass, guiding you toward better timing, balance, and stewardship in your investments.
Is it too late for silver?
Silver has been in the spotlight, delivering strong returns for 2025. However, despite this surge, silver is still considered undervalued because the gold-silver ratio remains elevated. This indicates that there’s still potential growth for silver.
Moreover, silver benefits from increased industrial demand, ranging from solar panels to electronics. So, even though silver is nearing all-time highs, the signal suggests that silver could still be a smart buy.
Let me know your thoughts. Do you believe there’s still room for silver to grow? Or do you feel it might be reaching its peak?
For more information, check out:
A Thought to Ponder:
With the devaluing of our currency, will gold become unaffordable?
And with the increase in technologies, will silver become harder to obtain?
Additional note, when it comes to technology, copper is often referred to as the highway, and silver is often likened to the glue.
