Silver Is Inexpensive Says the Gold to Silver Ratio

The gold to silver ratio tracks the degree to which silver is expensive or inexpensive compared to gold.  Since silver prices move too far and too fast compared to gold prices, the ratio drops in silver bull markets and increases as silver corrects lower.

Learn How to Exploit the Gold Frenzy!

This graph shows the ratio over the past 27 years.  Note the recent high in the ratio after silver and gold were “bombed” in 2008, and the recent low in the ratio when silver peaked in August of 2011.


gold to silver ratio from 1987 till 2014

After the silver price peak in 2011 it fell to a low in June 2013 and a double bottom low in December 2013.  The ratio is currently about 66 – at the high end of the 27 year trend.

What this proves:  Nothing.

What it strongly suggests: 

  • Silver has been correcting for over three years.  It could rally at any time.
  • Silver prices are currently LOW compared to gold prices – the ratio is at the high end of its 27 year trend channel.
  • Silver prices fall faster and rally more rapidly than gold prices.  When the price of silver finally takes off it will push the ratio much lower – perhaps to 20 or 30.
  • Many other indications (not shown here) also suggest silver is too low, over-sold, and ready to rally.

Investor demand for silver bars and silver coins is strong and increasing.  The High-Frequency Traders can suppress the price for only a limited amount of time.  I think silver prices will be higher by the end of 2014 and much higher by the next US presidential election.

The pieces of paper we mistakenly call money will become less valuable in the years ahead.  Take this opportunity to convert some paper currency to physical silver while the High Frequency Traders are gifting us with artificially low prices.

You might also find value in:

Silver in the Dead Zone of Disinterest
Silver Was Not in a Bubble in 2011


GE Christenson  |  The Deviant Investor

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  • Jungle Jolly

    Today I purchased more silver. I continue
    to stockpile this last year and I think im buying at a very good time once
    again. There could be 1 last drop in the price however it is insignificant even
    if it falls to $10 when it has already fell as much as it has. I have a strong
    feeling however and agree with David Morgan that silver saw the bottom last
    year when I loaded up. In 1982 u.s debt was 1.5 trillion and today its over
    17.5 trillion its CRAZY how much this has increased and I don’t even live in
    usa and I can see the opportunity. It is a TRANSFER OF WEALTH FROM WESTERN
    COUNTRIES TO ASIA it’s that simple and we are getting very close to a worldwide
    catastrophe and this is on top of already all of the wars and issues the world
    is having the list of countries with issues not just financial issues is
    EXTREME. I already have a massive holding but I continue to stockpile on pull
    backs to the floor of $18-20. I have absolutely no intention of selling. Feeling of being secure and answer to no-one is priceless and will become a necessity going forward.

  • silverstar

    trickofthetale, To give you and idea of what I am sure of what will happen, and perhaps not in this order. The dollar will crash by the end of the year. Any country that bought our T bills will start to dump them. I suspect it will start with Russia and China. China has already begun by buying property though out the U S and the world, Africa, Mexico, India, Brazil all the emerging countries. As the economy gets worse in the U S and we see inflation the likes none will believe we will start to see a dollar dump. That will be followed by a Stock Market collapse and the devaluation of the dollar of at least 60%. If we don’t see a bail in first which has been approved by the I M F. Imagine going to beg with $100,000.00 and waking up to find a balance of $40,000. That is what’s on its way. I sold my home in November in November of 2011. I also sold my business. I moved to Mexico where I CAN LIVE ON1/3 of what it cost me before. I took 80% of the proceeds from my home and business and bought gold and silver. Consult a financial analyst. If you have an account in the bank it will be taken. If you have a retirement acct it will be taken. If you have any type retirement account kiss it good bye. You are about to see the largest transfer of wealth in the world. My advise get your money and if you can get out of the country because when the people find out what has been done to them you will see chaos in the streets and marshall law. After that you may find yourself in a FEMA re education camp.
    My name is Robert Schoen and I write for one of the largest on line newspapers. If you can’t leave find a safe place with protection, food and water. And that is just the beginning my friends. If we have a magnetic polar shift you cac look forward to 300 to 400 mph winds for at least 30 days. I am nt here to scare you but to bring you the truth that you will never receive from the mainstream media. `do you research. The increase in meteor showers is a sign of a pending pole shift probably about 19 months out. Bless you all may you all be safe and as a close if you live within 300 miles of the coast you will drowned.

  • Dirkk

    I agree with you 100% Robert. I am fro Australia and hsve moved to the Philippines, bought a house and am now esiting for the crash to happen. I have transfered all my cash into silver. I am not a financisl expert nor do I claim to be one but as I see it all savings and cash will be taken when the global reset happens. I think possibly by the end of the year.