Gold-Silver Ratio: Silver’s Lag and Historical DivergencesThe gold-silver ratio - the number of silver ounces equals in value to one ounce of gold – has surged recently as gold prices rally while silver underperforms. Gold, a traditional safe-haven, has climbed to record highs amid economic uncertainty, whereas silver, which is partly an industrial commodity, has struggled to break past $35/oz. As a result, the ratio is around 100 – meaning gold is ~100 times the price of silver despite the correction in the ratio from its peak around 125.
For context, the ratio averaged 57 from 1975-2000, and between 2000-2025 the ratio has ranged from 32 and 125 (with the max level reached this month with an average of 68. The ratio has observed extreme spikes in unusual crises).
Today’s elevated ratio highlights the divergence between gold’s sharp rally and silver’s lagging performance. The 25-year mean of the ratio is at 68, suggesting the present levels (100) represent an extreme deviation in favour of gold.
Historical Parallels in Gold-Silver Divergences
Similar wide divergences between gold and silver have occurred in the past. Key historical episodes illustrate how silver eventually played “catch-up” after lagging gold – albeit with varying lag times:
1970s – Silver’s Late Surge: After the U.S. abandoned the gold standard, gold prices soared while silver lagged. However, silver eventually staged a sharp rally later in the decade, quickly closing the gap and driving the gold-silver ratio sharply lower.
1980s – Prolonged Underperformance: Following the 1980 peak, precious metals collapsed, with silver suffering far more than gold. The gold-silver ratio surged and remained elevated through the 1980s and 1990s, as silver failed to catch up and largely moved sideways until the 2000s.
Early 2000s – Post-Recession Catch-Up: After the 2001 recession, gold began a
new bull market while silver initially lagged. Eventually, silver outpaced gold’s gains over the next several years, significantly narrowing the gold-silver ratio.
2008 Financial Crisis – Sharp Divergence and Recovery: The 2008 crisis caused gold to outperform sharply as silver collapsed. However, as the economy recovered, silver staged a dramatic rebound, quickly closing the gap and normalizing the ratio by 2011.
Why Is Silver Lagging Now? Industrial Demand Uncertainty
Roughly half of silver demand is industrial (electronics, photovoltaics, chemicals). Persistent worries about a global manufacturing slowdown and elevated inventories have capped silver’s upside just as investors have chased gold for geopolitical protection.
Source: Silver Institute
Worries about industrial demand have been exacerbated by the recent trade uncertainties which impact industrial sectors in an outsized manner.
By contrast, gold’s appeal as a safe haven has been boosted by geopolitical and inflation fears, driving it to record highs in 2025.
Despite cyclical swings, the underlying secular trend has crept higher for decades. Gold’s monetisation (central-bank reserves, ETF holdings surge) versus silver’s demonetisation, higher real production costs for gold, and silver’s growing industrial elasticity are all factors that represent a risk to normalization of the GSR.
Even a forceful mean-reversion might therefore stall nearer 60–70 than the sub-40 extremes of earlier cycles.
Hypothetical Trade Setups
History shows that once macroeconomic uncertainty clears, silver often recovers lost ground quickly. In previous periods of extreme gold-silver divergence, from the 1970s through 2008, silver staged strong rallies that pushed the gold-silver ratio (GSR) back toward normal levels.
Today, however, silver’s outlook remains clouded by uncertainty, particularly amid the ongoing trade war. Prices risk stalling below resistance around $35/oz. Consequently, the normalization in the GSR may instead result from a correction in gold prices. Gold has consistently broken record highs, and its long-term outlook remains firmly bullish. Nevertheless, concerns about the sustainability of the recent rally are valid - last week, gold fell sharply after setting a new high above $3,500/oz.
In summary, a normalization in the GSR could result from either a silver rally or a gold correction. While each path remains uncertain, a position focused on the ratio itself is relatively insulated from further divergence.
Given this environment, we could express our view in GSR through a long position in silver and a short position in gold. Investors can implement this using CME Micro Silver and Micro Gold futures. This setup benefits from 72% margin offsets. The Micro contracts balance the notional value between both legs by using one contract each.
A hypothetical trade setup consisting of a short position in CME Micro Gold futures expiring in June (MGCM2025) and a short position in CME Micro Silver futures expiring in June (SILM2025), offering a reward to risk ratio of 1.6x, is described below.
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GSR
$GOLD - $SILVER ratio: ?IH&S, zoom out! H&S baby!! Larger timescales always dominate shorter ones. SO looking at only the D, it looks like there's a dump, then IH&S adn so a bearish turn/
But zoom out, and be reassured! It'sa giant h&s and we're just in a knuckle on the way down.
Thatsaid - be mindfful of strong resistance/bounce after the next run.
Silver 12y BULLFLAG, stay tuned for the seriesNext target is $40, that's coming out of the IH*S internally.
IS a conventional bullflag. Have a core downchannel, now building on that support to the top-right corner to BO. DOn't expect whips below core channel - UNLIKE 1y silver consolidation, 1y sideways continuation pattern, no structure HENCE needed to hit the bottom-right corner to generate the power for the upmove.
Tee purple is the actual flag boundaries, so break that and ka-pow!
But before then, expect ~$40 then a backtest.
Wait annd see teh next few piccies. YOur mind gonna be blown!
Silver/Sugar/DXYThe Gold/Silver ratio (GSR) tracks the relative performance of Gold over Silver, i.e. a breakdown of the chart indicates a stronger Silver performance relative to Gold.
In this chart I present a decision time for the GSR, where in the lower pane, in the past we can see a cross-over of the dollar strength (DXY) relative to sugar futures (SB1!) has been an inflection point for the GSR.
Sugar, as an analogy for real inflation and commodities more widely, has tended to outperform the dollar in a macro environment that is more favorable for silver outperformance.
At this crossover point in the lower pane, we may see rejection or a follow-through, I'm favoring the latter. The cross-over follow-through may have strong implications for silver performance.
Zoom out. Chill out.
Silver - Breakout - About to Start Leading GoldThat's a long way down.... :)
Sitting on the edge of the cliff.
Comparing price action in gold and silver today. Silver looks ready to take the lead.
Metals setting up for a big rally.
Looking back gold rose over $400 in two months 2011.
Banks are used to dumping paper gold shorts hitting sell stops, driving the price down. Lately it looks like those sell stops have been replaced with buy limits..... Price goes down a few dollars and then rebounds hard and fast.
Banks have lost control.
$OSTK $100MM Makara, GSR investment due diligence processingIt is interesting to me that the price dipped at all. It looks like many traders are confused about the meaning of what an MOU is. Donald Trump recently was confused about it when the term was being used for the document spelling out the trade agreement with China.
www.stockme.info
Regardless of that, it looks like the wider ABC corrective wave is now complete and found support on the cloud a second time at $17.25.
The chart above shows what the next impulse wave may look like while folks digest the impact of a $100 million investment in Overstock subsidiaries tZERO and Medici Ventures leading up to earnings.
Gold:Bitcoin Ratio Now Higher Than Physical Gold:Silver Ratio!You know that old crypto saying: "Litecoin is Silver to Bitcoin's Gold". Well now 'Gold is Silver to Bitcoin's Sound Money Supremacy'. Well in price ratio terms it is. I know I'm not comparing apples with apples, & for the purpose of not embarrassing Gold's post crypto performance any further, it's probably best I don't. But in terms of available supply, there are currently 777,275 metric tonnes of Silver, compared to 166,500 metric tonnes of Gold; Which gives a physical supply ratio of roughly 4.66 tonnes of Silver to each tonne of Gold. This obviously doesn't translate to the current Gold to Silver price ratio, that currently sits around today 75:1. This is why many think Silver, which has many irreducible industrial & technological applications is often sighted as a sleeping giant in terms of investment vehicles. But like gold, silver suffers heavily under the influence of secondary & futures markets, that trade paper contracts leveraged many multiples over & above the underlying physical metal good for delivery. Opting instead to settle 'delivery' in fiat currencies rather than physical metal. And herein lies the beauty of Bitcoin, with it's own baked into the protocol permissionless instant settlement & good delivery mechanism it will always be an impossible beast to bridle, as secondary & futures markets prove to be superfluous to it.
Sources:
demonocracy.info
demonocracy.info
Gold Silver RatioGold Silver Ratio is showing that Silver is a better bet than Gold at the moment. Looks very likely the smaller channel will break downwards unable to break above the larger channel and ratio could end up near bottom of this range in mid 20's This may be a clue that bull trend in precious metals is about to resume.