The gold-silver ratio measures how many ounces of silver are required to purchase one ounce of gold.AI Quick ReadThe gold-silver ratio has witnessed sharp volatility so far this year, tracking fluctuations in the prices of precious metals. On Monday, the ratio slipped below the key level of 60, hovering near a one-month low.
Earlier in the year, the ratio dropped below 44 in late January as silver prices surged. However, a subsequent correction in silver pushed the ratio above 70 in February. In March, it remained relatively stable above the 60 mark. With both gold and silver prices declining in April, the ratio has once again fallen below 60.
On April 20, gold prices traded lower, weighed down by a stronger dollar as reports of renewed disruptions in the Strait of Hormuz pushed crude oil prices higher, reviving inflation concerns.
Spot gold price fell 0.7% to $4,792.89 per ounce, after hitting its lowest level since April 13 earlier in the session. Spot silver price declined 1.6% to $79.49 per ounce, while US gold futures for June delivery dropped 1.4% to $4,812.20.
In the domestic market, MCX gold rate fell by ₹1,148, or 0.74%, to ₹1,53,461 per 10 grams. Silver prices declined more sharply, down ₹5,492, or 2.14%, to ₹2,51,650 per kg.
The gold-silver ratio measures how many ounces of silver are required to purchase one ounce of gold. A rising ratio indicates that gold is outperforming silver, while a falling ratio suggests stronger performance by silver.
Historically, a ratio above 80 indicates that silver is relatively undervalued compared to gold, while a ratio near 50 suggests silver is relatively expensive or outperforming.
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, the recent decline in gold-silver ratio below 60 reflects silver’s stronger rally relative to gold.
“A ratio near 60 indicates that while gold continues to rise, it is doing so at a slower pace than silver,” he said.
Trivedi emphasized that a decline in the ratio is not a bearish signal but rather indicative of strength in the broader precious metals bull market. He noted that gold continues to act as a safe-haven asset, supported by central bank buying, ETF inflows, and macroeconomic uncertainty, while silver has already seen a sharp rally and may be prone to near-term corrections.
He expects MCX silver price for May futures to correct toward ₹2,35,000 – ₹2,40,000 per kg, while MCX gold prices may decline at a relatively slower pace to ₹1,47,000 – ₹1,48,000 per 10 grams. Despite this, he recommends buying on dips, citing strong underlying fundamentals.
Kaveri More, Commodity Analyst (Technical Research) at Choice Broking, said that a drop in the gold-silver ratio below 60 typically signals that silver is outperforming gold, often seen in the mid-to-late stages of a precious metals bull cycle when speculative, industrial, and safe-haven demand for silver accelerates.
“With the ratio currently hovering around the 20- and 50-day EMAs near 62, a sustained breakdown below 58.5–57 – 55 could tilt the risk-reward in favour of silver, indicating further relative upside even if gold remains broadly stable,” she said.
However, she added that a compressed ratio may also suggest that gold is relatively undervalued. Investors often apply the “80/60 rule,” trimming silver exposure or reallocating to gold as the ratio approaches 55–60, while viewing the 65–68 range as a potential re-entry zone for silver if the ratio rebounds.
“Structurally, with silver expected to remain in a supply deficit and supported by strong industrial demand, a ratio trending toward 50 or lower would signal a high-volatility, silver-led phase within the broader precious metals bull market,” More noted.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.