Gold to Silver Ratio

What the ratio measures

Ratio = gold price per gram ÷ silver price per gram

It answers one question: how many grams of silver does one gram of gold buy? A high ratio means gold is expensive relative to silver, a low one means the opposite. Traders watch it as a crude sentiment gauge — silver is more industrial and more cyclical, so the ratio tends to rise in risk-off periods and fall when growth expectations improve.

Worked examples

₹6,000 ÷ ₹75 → 1:80
₹3,000 ÷ ₹75 → 1:40
₹12,000 ÷ ₹75 → 1:160
₹6,000 ÷ ₹37.50 → 1:160
₹6,000 ÷ ₹150 → 1:40

Doubling the gold price doubles the ratio; halving the silver price does exactly the same. The ratio has no units, so it works with any currency as long as both prices are quoted the same way — per gram, per ounce, per tola.

Reading the number

The long-run average has sat near 60–70 for decades, but that is a description of the past rather than a law. The ratio has spent years between 40 and 50 and also above 90, and each extreme has produced confident predictions that did not survive the next two years. A ratio of 80 says silver is cheap relative to gold by historical standards; it does not say silver will rise.

Two things move the ratio that have nothing to do with relative value: jewellery demand in India and China, which is mostly gold, and industrial demand for silver in solar panels and electronics. A solar build-out can tighten silver supply and pull the ratio down without gold moving at all.

Practical use

Compare like with like. Retail jewellery prices include making charges and GST, and those percentages differ between the two metals, so a ratio calculated from shop tags is not the same as one from spot prices. Use the same basis for both — ideally the metal rate before making charges.

For a buyer deciding between the two, the ratio is a weak timing tool and a reasonable sanity check. It is not a valuation model, and it says nothing about the rupee, which can move both prices together.

Frequently Asked Questions