The chart above shows the historical ratio of gold to silver up to June 9, 2025.
This ratio describes how many ounces of silver are needed to buy one ounce of gold. Currently, the ratio is back close to the 100 mark, which historically indicates that silver is significantly undervalued.
The green dotted line at a ratio of approximately 100 marks an extreme level at which silver has been considered significantly undervalued in the past.
What is striking is that every time this line has been reached or exceeded in the past, a strong counter-movement in favor of silver has followed – the ratio then always fell towards the red line in the range of 20.
Why is silver particularly attractive at present?
- Historically recurring pattern: The chart clearly shows that high phases in the gold-silver ratio (green line) have been followed in the past by massive declines to the red line – a ratio of around 20. This pattern has repeated itself several times over decades.
- Potential for extreme revaluation: Should this historical trend repeat itself, the ratio could actually fall back towards 20 from its current level of around 100. This would correspond to a dramatic outperformance of silver relative to gold – a potential price multiplier for silver investors.
- Strong fundamental demand: In addition to these technical arguments, fundamental factors also favor silver. Industrial demand – particularly in the solar industry, electromobility, and electronics – is growing steadily, creating a structural shortage.
Conclusion
The combination of historically extreme undervaluation and cyclical repetition suggests that silver currently offers a significantly more attractive risk/reward profile than gold. Potential for reversion to the mean: If the ratio returns to its historical average of around 50-60, silver would have considerable upside potential relative to gold.
And even a decline in the ratio to its historical low of 20 – as has happened several times in the past – cannot be ruled out in the long term. So those who think countercyclically and rely on historical patterns can now see a rare opportunity to invest in silver.
Stephan Bogner
Contact
Rockstone News & Research
Stephan Bogner (Dipl. Kfm., FH)
Müligässli 1, 8598 Bottighofen
Switzerland
Phone: +41-71-5896911
Email: info@rockstone-news.com
Disclaimer: This article reflects the personal opinion of the author. Elementum assumes no responsibility for the accuracy of the content and accepts no liability for its use. This article may contain links to external third-party websites. Elementum is not responsible for the content of these external sites and expressly distances itself from all information provided there. At the time the links were created, no unlawful content was identifiable. This article does not constitute a recommendation to buy or sell. Elementum International AG is a Swiss company that specializes exclusively in the storage of physical precious metals in a high-security vault facility located in the St. Gotthard mountain massif in Central Switzerland. The Board of Directors and Executive Management of Elementum International AG have been selected solely based on their professional expertise and long-standing experience in precious metals markets. As these individuals may also be professionally active outside their roles at Elementum International AG, the company has no influence over their external activities and respects their right to freedom of expression. Therefore, the views expressed by persons working with or for Elementum do not necessarily reflect the opinion of Elementum International AG. Investments in precious metals are subject to risks, including those specific to the structure of this market. Please read our full risk disclosures and consult a licensed financial advisor before making any investment decisions. Neither the author, Elementum International AG, nor Elementum Deutschland GmbH assume any liability for actions taken based on the information provided. Past performance is not indicative of future results.
