As of this writing, gold is over $5,000/oz and silver $77/oz. Depending on your budget, that price difference may make the decision for you as to which metal to buy. But if you’re looking to build a precious metals portfolio, where do you start? Which one do you buy more of? And how do you know when to change between the two?
This article covers the gold-to-silver ratio when to buy for your specific needs.
What is the gold to silver ratio?
The gold-to-silver ratio tells you how many ounces of silver it takes to equal the price of one ounce of gold. Precious metals investors use this to figure out when to buy gold versus when to buy silver. Here’s how to calculate it:
Formula: gold price ÷ silver price = ratio
As of this writing, the numbers look like:
$5,000 ÷ $77 = 65:1
A higher ratio (80:1 or 100:1) means gold is expensive relative to silver. That’s when it can be a good time to buy silver.
A lower ratio (40:1 or 50:1) means silver is expensive relative to gold. This indicates gold might be the better buy.
Historical and current gold-silver ratio
You’ll find the ratio changes every day based on economic conditions and what’s happening in the precious metals market. Here’s what we’ve seen in the past:
| Period | Ratio |
|---|---|
| Historical average | 60-68:1 |
| 1980s-2010s typical range | 40-60:1 |
| COVID extreme (March 2020) | 124-126:1 |
| Post-pandemic low (2020-2021) | Sub-70:1 |
| April 2025 extreme | 105:1 |
| Current (February 2026) | ~57:1 |
A quick rundown of the historical details includes:
Early 1900s through 1970s: Government policies kept the ratio between 30:1 and 40:1. Both metals backed currency, creating a stable relationship that lasted until President Nixon removed the dollar from the gold standard in 1971.
1980: Both metals hit extreme highs. The ratio compressed to 17:1, one of the lowest readings ever.
1990s-2000s: The ratio found a typical range of 50:1 to 60:1. This became the baseline for evaluating value.
2008 and 2020 crises: Fear pushed investors into gold during both periods. The ratio expanded to 80:1 in 2008 and hit a record 125:1 during the March 2020 COVID panic.
2020-2025: Silver recovered and gained 147% in 2025 while gold advanced 67%. The ratio dropped to around 57:1 to 65:1 by early 2026.
Why the gold and silver ratio matters
The ratio shows you when one is relatively cheap compared to the other.
Gold and silver have different demand drivers. Investors, central banks, and people looking for a safe store of value buy gold. Silver has industrial demand. About 60% of silver goes into solar panels, electronics, and manufacturing. This makes silver more sensitive to economic cycles and industrial growth.
Right now, the ratio is around 57:1. Historically, this makes silver attractive compared to gold. Some investors use extremes in the ratio to rebalance their precious metals holdings, selling one metal to buy the other when valuations change.
Recognizing extremes and buying opportunities
How should you interpret the gold-silver ratio, and what should you look for?
- Above 100:1: Silver is historically very cheap compared to gold. Consider buying more silver.
- 80-100:1: If the ratio falls in this range, silver looks attractive. You might want to add to your silver position.
- 40-60:1: The ratio is in a normal range.
- Below 40:1: Silver is expensive relative to gold. Gold might be the better buy.
Keep in mind that the ratio can stay at these levels for months or even years. Don’t use it as a perfect timing tool. Instead, use it as one factor in your overall precious metals strategy.
Market conditions that impact the gold and silver ratio
Silver prices swing 2-3 times more than gold prices because the silver market is smaller. This creates bigger potential gains but also bigger risks.
Silver has a unique position in the market. Investors buy it as a precious metal to protect wealth, just like gold. But industries also buy it for solar panels, electronics, and other manufacturing. Because it’s an industrial metal, silver prices respond to both investor demand and manufacturing demand.
When the economy expands, industrial demand for silver tends to increase. During economic uncertainty, investor demand picks up.
Great conditions for silver buyers
A few situations when silver is undervalued compared to gold:
- Geopolitical stress: During crises, investors rush to buy gold as a safe haven. This pushes the ratio up and creates good buying opportunities for silver.
- Economic recovery: When the economy grows, industrial demand for silver increases. The ratio typically compresses as silver prices catch up.
- Central bank buying: Central banks buy gold, not silver. When they increase their gold purchases, the ratio climbs, and silver becomes more attractive.
- Supply deficits: Silver faces its sixth consecutive annual deficit in 2026, with a 67 million ounce shortfall. When supply can’t meet demand, it puts upward pressure on silver prices.
Building a trading strategy for gold and silver
When gold is outperforming silver, and the ratio drops to something like 50:1, here are some strategies to keep in mind:
Mean reversion trading
The gold-to-silver ratio tends to revert back to its historical average of around 60-65:1. You can use this for timing. When the ratio spikes well above this average, silver looks cheap. When it drops well below, gold looks cheaper.
But don’t rely on the ratio alone. You also need to consider inflation expectations, interest rates, the strength of the dollar, and demand trends. The ratio is just one tool to help you decide when to buy gold versus silver.
Portfolio allocation
Most experts recommend holding 5-15% of your portfolio in precious metals. Within that allocation, you might hold 35-60% in gold and 30-45% in silver. You can adjust these percentages based on the current ratio and your risk tolerance.
Ratio-based action table
Here’s how some investors approach buying these two metals:
| Ratio range | Silver allocation | Gold allocation | Action |
|---|---|---|---|
| >100:1 | 50-60% | 40-50% | Agressively buy silver |
| 80-100:1 | 45-55% | 45-55% | Buy more silver |
| 60-80:1 | 40-50% | 50-60% | Balanced approach |
| 40-60:1 | 30-40% | 60-70% | Buy more gold |
| <40:1 | 25-35% | 65-75% | Increase gold |
Investment timelines
Your investment timeline changes how you use the ratio.
- Long-term investors (5+ years): Buy at ratio extremes even if prices are volatile. Over time, the ratio tends to revert to its historical average, which works in your favor.
- Short-term traders (1-3 years): The ratio alone won’t give you precise timing. You’ll also need to look at technical indicators and price charts to decide when to buy and sell.
Figure out which ratio levels make sense for you based on your strategy and risk tolerance. This becomes your buying range for adding new positions.
Other metals for diversification
You can also add platinum or palladium to your precious metals portfolio. Some investors hold 5-10% of their metals allocation in these metals for additional diversification and industrial exposure.
When you buy, stick with low-premium forms like 1-ounce coins and 10-ounce bars. These cost less over spot price and help you build your position without paying extra fees.
Reading the charts
If you trade precious metals over shorter timeframes, you can use technical analysis alongside the ratio:
- 200-day moving average: When the ratio crosses above its 200-day moving average, silver is weak relative to gold. When it crosses below, silver is starting to outperform.
- Support and resistance levels: Historical data shows the ratio tends to hit highs between 100-126:1 and lows around 30-40:1. These levels act as barriers. When the ratio approaches 80:1 from above, it often compresses further.
- Trend analysis: Watch whether the ratio is expanding (gold getting more expensive relative to silver) or compressing (silver catching up to gold). Compression after multi-year extremes often signals mean reversion.
- Relative strength index and momentum indicators: These tools help you confirm whether a ratio move has strength behind it or if it’s running out of steam. They’re especially useful at extremes to validate your timing.
Recent example: 2025-2026
The ratio hit 105:1 in April 2025, then dropped to about 57:1 by February 2026. During this period, silver gained 147% while gold advanced 67%. This shows how mean reversion works after the ratio hits an extreme.
Where could silver go from here? Some forecasts predict jaw-dropping prices above $1,000 per ounce. We discuss these projections and what could drive them in our recent podcast:
Portfolio risks and rebalancing
How much risk you can handle affects your gold and silver allocation.
Understanding your risk tolerance
If you have high risk tolerance, you can increase your silver allocation to 50-60% when the ratio exceeds 100:1. This takes advantage of potential mean reversion.
Conservative investors should keep silver at 40-45% maximum, even at ratio extremes. Silver prices swing 2-3 times more than gold prices. You need to be honest about whether you can handle those price swings without selling in a panic.
How to use the ratio as an investment tool
There are four key steps you can take to use the charts as a guideline for your specific needs:
- Set your target ranges: Decide which ratio levels trigger action for you. For example, you might decide to buy silver when the ratio hits 90:1 or 110:1. Having these levels set in advance keeps you from making emotional decisions.
- Rebalance when metals grow too large: If price increases push your precious metals above 10-15% of your total portfolio, rebalance. Using this approach helps you lock in gains and reduces your concentration risk.
- Use dollar-cost averaging: Buy consistently over time rather than trying to time one large purchase. For example, you might accumulate about 100 ounces of silver annually through regular purchases. This smooths out your entry costs across different market conditions.
- Check quarterly or monthly: If you’re a long-term investor, check the ratio quarterly. If you actively trade, check monthly. This keeps you informed without overtrading.
Don’t rely on the gold-silver ratio alone
The gold-to-silver ratio helps with timing, but it has limitations. Silver price forecasts for 2026 show how uncertain the market can be. Conservative estimates put silver at $56-65 per ounce, while bullish forecasts reach $81-150 per ounce. This wide range means the ratio can move in unexpected ways.
Use the ratio alongside other analyses. Look at supply deficits and industrial demand patterns. Consider what the Federal Reserve is doing with interest rates and how geopolitical events might impact metals prices.
Don’t put too much of your portfolio into one metal just because the ratio looks compelling. The ratio is a useful tool, but it works best as part of a broader investment strategy, not as your only decision-making tool.
Taking action with physical gold or silver
Here’s how to apply the ratio to your own portfolio:
- Calculate your portfolio’s ratio: Take the total value of your gold holdings and divide it by the total value of your silver holdings. This shows you your current allocation, not just the market ratio.
- Track the ratio: Free online charts let you monitor the gold to silver ratio. Check weekly or monthly, depending on your investment timeline.
- Current opportunity: The ratio around 57:1 represents a 15-year low. This makes silver historically attractive compared to gold, especially with ongoing supply deficits and strong industrial demand.
- Work with professionals: Consider consulting a financial advisor to make sure your precious metals strategy aligns with your overall portfolio goals and timeline.
Final thoughts on the gold and silver ratio
The ratio is a rule of thumb you can use to look at the current gold price compared to silver and see which is the better relative value.
To learn more about adding physical gold or silver to help protect your financial future, connect with the Swiss America team today!
Gold to silver ratio: when to buy FAQs
What ratio of gold to silver should I buy?
The answer here depends on your goals, risk tolerance, and what the market ratio tells you right now. Most investors use a combination of personal preference and market signals to decide their allocation. Common allocation approaches:
- Equal split (50/50): Balances exposure to both metals without trying to time the market. Works for investors who want simplicity and don’t want to actively manage their allocation.
- Gold-heavy (70/30 or 80/20): More conservative approach that leans on gold’s stability and safe-haven reputation. Better for investors with lower risk tolerance who want less volatility.
- Market-based adjustments: Buy more of whichever metal the ratio says is cheap. When the ratio is high (above 80:1), buy more silver. When it’s low (below 50:1), buy more gold. This approach requires active monitoring and rebalancing.
What is the 80 50 rule for gold to silver?
The 80/50 rule tells you when to buy silver versus gold based on the ratio. When the ratio climbs above 80:1, buy silver. When it drops below 50:1, buy gold.
- Above 80:1: Silver is undervalued relative to gold. Buy more silver or trade some gold for silver because silver has room to catch up.
- Below 50:1: Gold is cheap relative to silver. Buy more gold or trade some silver for gold to take advantage of the shift.
- Historical performance: Since 1985, this rule has triggered about 7 trades (roughly one every 3-5 years). Investors using this strategy have potentially turned 1 ounce of gold into nearly 5 ounces equivalent through mean reversion.
Is gold or silver a better investment in 2026?
Either can be better. It depends on your risk tolerance and investment goals. Gold offers stability and safe-haven protection, while silver has higher upside potential but more volatility.
- Recent performance: Silver rose 147% in 2025 versus gold’s 67%. The ratio compressed to around 57:1, below the historical average of 60:1. This shows silver’s strong momentum but also suggests its gains might slow down.
- Gold’s advantages: Gold excels during uncertainty and geopolitical risk. It’s better for conservative investors focused on wealth preservation. At current ratios, some analysts see gold as relatively undervalued after silver’s big rally.
- Silver’s advantages: Silver benefits from industrial demand in solar panels, AI infrastructure, and electric vehicles. Silver has been in short supply. The bigger price moves appeal to aggressive investors who want higher returns, especially if the economy picks up and factories need more silver.
What resources does Swiss America provide to help learn about the precious metals market conditions?
Swiss America offers educational resources to help you understand precious metals trends, market conditions, and investment strategies. You can access these for free on the website.
- Special reports: “The Silver Report” covers supply shortages, industrial demand, inflation impacts, and how to use the gold-silver ratio for your portfolio. These reports break down complex market topics into practical guidance.
- Blog and guides: In-depth articles like “How to Invest in Precious Metals” give you step-by-step advice on buying, selling, and choosing dealers. Regular market commentary keeps you updated on trends and conditions.
- Podcasts and updates: Podcast content and daily insights from experts on gold ownership, rare coins, and market dynamics. Get analysis you can listen to while you’re on the go.
Does Swiss America sell more gold or silver?
Customer demand is almost even, with slightly more people choosing gold. Based on Swiss America’s 2025 sales data, 51% of investors chose gold while 48.5% chose silver.
- Nearly equal split: The difference between gold and silver sales is minimal. This shows that both metals appeal to investors for different reasons. Platinum and palladium make up only a small fraction of total sales.
- Gold IRA popularity: Gold IRAs represent 21% of all sales. Most buyers bought precious metals for retirement in Q2 and Q3 of 2025, which coincided with rising gold prices.
- What this means for you: Both metals work for building a precious metals portfolio. Your choice depends on your goals, risk tolerance, and what the current ratio tells you about value.
The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.
