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Gold-Silver Ratio Exploding

Commentaries & Views

The gold-silver ratio has exploded to one of the widest margins in history, with gold trading almost 85 times the price of silver. The ratio set by law is supposed to be 15-to-1; how did we get to 85-to-1? This is the highest level since the 2007-2008 global financial crisis.

To some degree, having such an extensive history on how the prices of gold and silver relate to one another can be useful for investors. Today's ratio of nearly 85-to-1 would certainly suggest that silver could be the more attractive investment opportunity than gold at these prices. Of course, markets don’t have to make sense and the ratio could widen still.

When investing in any financial product, hard asset or commodity, there are no rules, only probabilities. Although we like both gold and silver here because of the large spread, we would be bigger buyers of silver. We are looking for both gold and silver to break out to the upside, but first we must suffer through the pain of consolidation.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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