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Silver Surges Past Gold: Ratio Hits Historic Lows
26 Jan
Summary
- Silver price has rallied 200% in the last 12 months.
- The gold-silver ratio dropped from 127 to 50.
- Dual demand for silver as monetary hedge and industrial metal.
The gold-silver ratio has sharply declined, reaching lows not seen in years. In April 2025, 1 kg of gold would have bought approximately 110 kg of silver, a stark contrast to the current 47 kg. This shift indicates a structural repricing of silver relative to gold.
This compression, from a pandemic-era high of 127 to 50 at the start of 2026, is attributed to silver's rapid 200% rally over the last 12 months, eclipsing gold's 80% rise. Analysts suggest such rapid declines often occur in late-stage precious metals bull markets.
Silver's outperformance is fueled by a dual demand surge. It is sought after as a monetary hedge and is critical for industrial applications in solar, electric vehicles, and grid infrastructure. Currently, both gold and silver are trading at record highs.
While the long-term average gold-silver ratio is around 70, its current level near 50 is considered unsustainable by some analysts. A reversion to higher ratios might favor gold. However, others believe silver's outperformance will continue due to supply shortages, potentially driving the ratio as low as 40.
