Gold-Silver Ratio: Its History, 2025 Predictions, and How to Use It for Your Investments

For investors, the gold-silver ratio is one way to determine when it is best to buy and sell precious metals. When the ratio is high, it may be the right time to purchase silver. When it’s low, gold may be a better buy.

Historically, the gold-silver ratio has increased during times of instability, and it most recently peaked during the COVID-19 pandemic. Some experts predict silver gains will outpace gold in 2025, and the ratio could drop in the coming year. Here’s what to know about the gold-silver ratio and how to use it to time precious metals purchases this year.

Table of Contents

1. What is the gold-silver ratio?
2. What has been the gold-silver ratio historically?
3. Gold-silver ratio predictions for 2025
4. How should precious metals investors use the gold-silver ratio?
5. Where to invest in gold and silver

What is the gold-silver ratio?

The gold-silver ratio compares the value of gold to the value of silver. It’s calculated by dividing the price of gold by the price of silver. 

Some people speak of it in terms of how much silver is needed to purchase an ounce of gold.

For instance, if the ratio is 60:1, that means you can purchase 60 ounces of silver for the same price as one ounce of gold. Often, the ratio is stated as a single number. In this example, it would be simply 60.

When the ratio is high, silver can be affordable. Meanwhile, a low ratio could encourage investors to buy gold instead.

What has been the gold-silver ratio historically?

According to VC Elements, an online publication that reports on various investing opportunities, the gold-silver ratio dates back to ancient Egypt, when it was set at 2.5:1. For much of history, governments dictated the ratio. For instance, the U.S. Coinage Act of 1792 set the ratio at 15:1.

As countries decoupled their currency from precious metals, the value of gold and silver began to fluctuate more widely based on market conditions. During the past 100 years, the gold and silver ratio has varied widely. Here was the ratio at various times in recent history:

• End of World War I: 18.4
• Start of World War II: 99.8
• End of the gold standard in the U.S.: 26.5
• Start of the Gulf War: 79
• Start of the COVID-19 pandemic: 123.3

According to the J.P. Morgan Center for Commodities at the University of Colorado Denver, the gold-silver ratio has historically increased during times of instability and hit its peak during the COVID-19 pandemic. Currently, the ratio is around 90.

Investors have used the ratio to help guide buying decisions in the past. The 80/50 rule is a commonly used rule of thumb based on the gold-silver ratio. Those who follow this rule believe it is best to buy silver when the ratio exceeds 80 and buy gold when it drops below 50.

Gold-silver ratios between 50 and 80 are more common and may indicate that the values of the two metals are balanced, with neither underperforming nor outperforming the other. According to Elliott Wave Forecast, the ratio has averaged around 65 since the 1970s.

What are the gold-silver ratio predictions for 2025?

As we enter the new year, some industry observers predict that the gold-silver ratio will drop in 2025.

Gold hit record highs at the end of 2024 while silver—although gaining in value—lagged behind. That helped push the gold-to-silver ratio higher. However, silver could outpace gold in the coming year and that will help close the gap in prices and reduce the ratio.

The Silver Institute predicts the precious metal will experience a significant deficit in 2025. In other words, there is insufficient supply to meet demand, an economic condition that typically drives up prices. The institute points to industrial uses as helping to spur demand for silver this year.

Silver industrial fabrication is expected to grow 3% in 2025, led by the following sectors:

• Renewable energy
• Automotive
• Consumer electronics

Demand for physical silver as an investment is also expected to increase by 3%, according to The Silver Institute.

Global asset manager Sprott says silver prices were already on the rise in 2024—up nearly 22%—and they may continue to see double-digit gains in 2025. However, some experts say cryptocurrencies could draw investors away from precious metals.

If the price of silver should rise faster than that of gold, the gold-silver ratio will drop. However, if silver can’t keep up with expected increases in the value of gold, the ratio will hold steady for now.

How should precious metals investors use the gold-silver ratio?

Some investors look at the gold-silver ratio to time their purchases. When the ratio is high, they may concentrate their purchases on silver and then switch to gold when the ratio drops.

A common trading strategy considers both the prices of gold and silver as well as the ratio. Here’s how this approach might look:

Ratio	Gold and silver prices	Action
Trending upward	Trending upward	Buy gold
Trending Upward	Trending downward	Sell silver
Trending downward	Trending upward	Buy silver
Trending downward	Trending downward	Sell gold

There is also a switching strategy that calls for people to trade their silver for gold, or vice versa, based on the ratio. 

For instance, those following the 50/80 rule of thumb may trade their silver for gold when the ratio drops below 50. Or they may convert their gold to silver when the ratio exceeds 80.

An investor who began purchasing precious metals in 1985 could have increased their holdings by four times using this strategy, according to precious metals dealer Silver Bullion. It adds that this approach may “tend to lower price risk as (investors) switch out of metals that raise disproportionately fast, providing less volatile and higher results over the long term.”

Of course, the gold-silver ratio does not guarantee what the future might hold for the precious metals market. What’s more, if you are holding your gold or silver in a precious metals IRA, there may be several fees involved in trading your gold for silver. As a result, this ratio shouldn’t be the only factor you use when making investment decisions.

The gold-silver ratio (GSR) can provide valuable insight into the potential performance of gold and silver, helping investors gauge economic stability versus uncertainty and its impact on their investments. If you’re managing your own portfolios, monitoring the GSR can signal strategic opportunities to buy or sell, making it a useful tool for timing precious metal trades.

Where to invest in gold and silver

If you are ready to invest in gold and silver, you have several options:

• Precious metals IRA: These IRS-regulated retirement accounts come with tax benefits, but you must follow strict government rules.
• Physical metals: Buying and holding precious metals outside an IRA gives investors more flexibility although it also means foregoing tax benefits.
• Gold and silver stocks: For those who don’t want to own and store physical metals, gold and silver stocks are an alternative investment option.

If you decide to purchase physical gold—either within or outside an IRA—the dealer you select can make the process easier. For instance, many gold IRA companies clearly identify eligible products. Plus, dealers may have useful charts to help you track spot prices, the gold-silver ratio, and more.

Priority Gold is one example. It is highly rated for offering its customers an excellent online experience, including price charts for gold, silver, and platinum. It also offers market news, including an analysis of the future of the gold-silver ratio.

American Hartford Gold is another company that, among its market news, offers pricing chats and analyses of the gold-silver ratio.

If you want to specifically track the gold-silver ratio, you can find charts on the following websites, among others:

• Chards
• Longtermtrends
• TradingView
• Macrotrends

With the price of gold and silver expected to rise in the coming year, now might be the time to invest in precious metals. To get started, check out the following companies that get top rankings for being among the best gold IRA companies.