Gold Silver Ratio - How Is It Calculated?
The gold/silver ratio may sound complicated, but it is actually extremely simple. Once you know how to calculate the ratio on your own, you will be able to check which one might offer the better value at any given time. Soon enough, you can become an expert at "trading the ratio" — investing easier, faster, and smarter. Ready to get started?
Run the Numbers
So you want to invest in gold and silver safely, but aren't quite sure how much money to put toward each precious metal? All you need to do is divide the gold price by the silver price. Be sure to use the most current, up-to-date prices to make the best choice. You can expect that this ratio will fluctuate on a day-to-day basis, although the two prices generally move in the same direction.
Why Does the Ratio Matter?
Once you understand how to calculate the gold/silver ratio for yourself, you can keep the numbers in mind each day. When the ratio rises, it means gold is becoming more expensive. On those days, silver could be a better value for your money. When the ratio drops, gold might be the best choice to purchase. Therefore, when the ratio is high, buy silver. When it's low, go for the gold. This is called "trading the ratio," a common investment practice. Easy enough, right? If the practice is that simple, what's all the fuss about?
The Gold/Silver Ratio: History and Mystery
Historically, the gold/silver ratio was a huge part of everyday life. Why? Because for centuries, people minted coins directly from both gold and silver. To know what their money was worth, everyday people needed to know the math. They also wanted to know how much of the shiny stuff was on the Earth.
In places without domestic silver mines, such as ancient Egypt and medieval Japan, the ratio skyrocketed, making silver much more valuable than gold. Over time, the growth of the global market eased the ratio and improved the balance of gold and silver across the globe.
The Ratio Today
Of course, the ratio hasn't always stayed so balanced, which is why it is important to know how to calculate the number today. Especially in the United States, gold and silver prices have become more volatile because of several factors and events, including the end of silver coinage, the death of the Gold Standard, and big-time investors such as Warren Buffet and the Hunt Brothers. The ratio has also seen several dips and surges resulting from more general financial crises and recoveries.
Gold to Silver Ratio - 100 Year Historical Chart
You Calculated the Ratio — Now What?
Once you know how to calculate the gold/silver ratio, you are ready to start investing safely and easily in gold and/or silver; the choice is yours. It is an exciting time to watch the ratio, in 2020 the ratio at its widest since 2008. OneGold can help you buy and sell both gold and silver units with all the ease, security, convenience, and comfort you desire.
How to Start Gold Investing with OneGold
With a deep understanding of precious metals unmatched in any competing partnership, APMEX and Sprott came together with a shared vision for the evolution of precious metals ownership. OneGold is the result of the knowledge, experience, and resources of these two globally recognized partners.
- Create a Free Account at OneGold.com
- Choose between our selection of investment-grade precious metals.
- Low premiums & tight spreads.
- Purchase using Bitcoin, Check, Credit Card or connect your Bank Account.
- No need to wait on funds clearing, you can “Buy Now, Pay Later”.
- Fully allocated and segregated investment grade precious metals.
- Annual storage fees are Silver .30% & Gold .12%
A guide to investing in gold.
A guide to investing in silver.
A guide to investing in platinum.