Metal Ratios

Track key ratios between precious and base metals for relative value analysis

Metal ratios measure the relative value between two metals by dividing their prices. Traders and investors use these ratios to identify when one metal may be over- or undervalued relative to another, based on historical averages. Click any ratio below to see its interactive chart, historical context, and detailed analysis.

How to Use Metal Ratios for Trading Decisions

Relative Value & Mean Reversion

When a ratio is significantly above its historical average, the numerator metal may be overvalued relative to the denominator (or the denominator is undervalued). Many traders believe ratios tend to revert to their historical average over time — extreme readings can signal trading opportunities.

Gold/Silver Ratio

Historical average is ~65-70. Above 80 = silver is cheap relative to gold (buy silver). Below 60 = silver is expensive (buy gold). This is one of the most traded ratio strategies.

Gold/Copper Ratio

Serves as an economic sentiment indicator. A rising gold-copper ratio signals risk-off sentiment and potential economic slowdown. A falling ratio signals economic optimism and risk-on.

Ratio Trading Setups

Ratio trades are market-neutral — you profit from the relative move regardless of whether both metals go up or down. This makes them powerful tools during uncertain markets.

BULLISH Denominator (Buy Undervalued)
  • Ratio well above historical average (denominator is cheap)
  • Ratio starting to fall from extreme high (mean reversion beginning)
  • Gold/Silver >80 — historically strong silver buy signal
  • Ratio diverging from macro fundamentals
BEARISH Denominator (Avoid)
  • Ratio well below historical average (denominator is already expensive)
  • Ratio still falling from low (trend continuation, not reversion yet)
  • Gold/Silver <50 — silver may be overextended
  • Industrial demand weakening for denominator metal
Example: In March 2020, the Gold/Silver ratio spiked to 125 — its highest ever. Traders who bought silver at that extreme saw the ratio collapse back to 65 within 18 months, with silver outperforming gold by over 50%.

Disclaimer: This is educational content for informational purposes only. It does not constitute investment advice. Always do your own research and consider consulting a licensed financial advisor before making investment decisions.

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