Experienced investors use gold-to-silver to determine the right time to buy and sell gold or silver. There are other factors like economic uncertainty, debt, inflation. These are used to e encourage potential investors to put their money in gold and silver. For the small scale investor, it might be hard to get an accurate read on all these factors, zeroing on the gold / silver ratio can make investing in gold less confusing. This ratio is particularly helpful to new investors who want to know how they can tell the best time to invest in gold and silver and the right time to sell these precious metals.

What is the Gold-to-Silver Ratio?

The simple answer to this is that the gold-to-silver ratio is the amount of silver you would need to by an ounce of gold. Let say the ratio is 50 to 1, what does it mean? It means that the current prices of gold and silver you would need 50 ounces just to purchase 1 ounce of gold.

How to determine this silver-to-gold ratio?

There are countless websites you can use to calculate the ratio or you could calculate it on your own. You take the price of gold and divide that by the current price of silver. To illustrate: say the price of gold is $1260 and silver is $30 the gold-to-silver ratio is $1260 (gold price) ÷ $30 (silver price) = 42 (Gold-to-Silver Ratio)

Investors who trade these two precious metals scrutinise this ratio and use it to determine if they should buy or sell gold or silver. The general consensus is that when the ratio is high, it’s a good time to buy silver. Conversely, when the ratio is low it is time to buy gold. Investors who trade in both silver and gold may trade their silver for gold when the ratio is low.

The Gold-to-Silver Ratio fluctuated between 14 and 100 between 1687 and 1900. Around the 1900, the ratio stayed around 16. This is because most countries were using silver and gold-backed currencies. Some countries like the United States and France assigned limits on what the gold-to-silver ratio should be. After the 1900s the ratio steadied and remained flat.

In the twentieth century the gold-to-silver ratio averaged between 47 and 50 but it has fluctuated wildly throughout this period.

Some experts believe the ratio will return to its peg- . average of 16. It’s worth noting that most experts advocate for a return to the pre-1900 average are the ones who are ardent supporters of silver investing.

In trying to predict the future, it has been clear from the rising price of gold that the price of silver would have to rise to about $105 per ounce in order for the gold-to-silver ratio to return to its pre-1900 average.

The gold-to-silver ratio may indeed be a very valuable tool to use when one wants to determine the best time to buy gold or silver. However, not everyone can read the signs correctly, and there are other factors that experienced investors use. There is no sure-fire way to get gold or silver investments right, even the most experienced traders suffer lapses in judgement. To be successful in gold and silver investment you need patience and you need to do your research, to be vigilant at all times and to be part of like minded investors who may be able to help you when things are tough.


  1. https://www.fxstreet.com/education/how-to-use-the-gold-to-silver-ratio-201606171545
  2. https://www.bullionvault.com/silver-guide/gold-silver-ratio