The Gold/Silver ratio has dropped below 70 for the first time since July 2021.
Statistically, this is a strong indication of some correction in Gold and Silver (Moreso specifically Silver). Here's why.
The Gold/Silver ratio not only indicates which one of the two is outperforming, but also often hints at a likely slowdown or sharp increase in the price of bullion.
Let's look at what happened last 4 times in the last 20 years when the ratio went from 80+, down to the critical level of 70 - exactly where the ratio is at right now.
We can see that the Gold/Silver ratio almost always bounces back from 68-70 zone when it falls from 80+ (with 1 exception in 2009 where it overstretched a little and consolidated, but the outcome was still a correction in Silver as you will see below).
Below are the instances that show what happened to Silver when the ratio fell to 70 and bounced back up towards 80.
1. July 2003 to Sept 2003: Silver corrected about 6%
After posting a Year-to-date (YTD) gain of 18-20%, Silver corrected about 6% before rallying further. The correction lasted for around 2 months.
2. Feb 2009 to Apr 2009: Silver corrected about 18%
After posting a YTD gain of 28-30%, Silver corrected about 18% before rallying further. The correction lasted for around 2 months.
3. Feb 2016 to Jan 2018: Silver corrected about 22%
After posting a YTD gain of about 45%, Silver corrected about 22% before falling further. This 22% correction lasted 20 months (almost 2 years).
4. Feb 2021 to Jan 2022: Silver corrected about 19%
After posting a 125% gain from Pandemic low, Silver corrected about 20% before falling another 20% in the following months. This 20% correction lasted 12 months (almost 1 year) and further 20% correction took another 10 months.
Finally, this is where we are right now after Silver posting 100% gain in 2025.
What does this mean for you?
A] If you're an Investor invested in Silver:
We are approaching a time to potentially reduce Silver exposure (if this makes sense with capital gains, etc.) Gold may be preferred over Silver for next few months.
Why? Because in the 4 instances in 20 years, where Silver corrected roughly 20% most of the time, Gold did not correct as much. This makes sense as Gold/Silver bounces from 70 to 80, it means Gold is outperforming Silver. If your view is decadal and you wish to ride out the correction, well, do nothing.
B] If you're an Investor wanting to invest in Gold or Silver:
Consider waiting till you find a dip. That dip hasn't come all 2025, but it is highly likely it will now soon, as indicated by 20 years of data.
C] If you're a trader:
From a weekly to monthly positional viewpoint, this is probably the time to avoid or reduce position size on upside, and keep an eye out for downside reversals. For trade durations of hours to a few days also, I would still look out for opportunities with downside bias and reduce position size for upside trades.
If this is helpful and you want a deep dive into any aspects, or want specific related analyses, feel free to drop a comment.
These views are for educational purposes only and are not financial advice; please consult your licensed financial advisor before making any investment decisions.
Trade/invest with poise.
Statistically, this is a strong indication of some correction in Gold and Silver (Moreso specifically Silver). Here's why.
The Gold/Silver ratio not only indicates which one of the two is outperforming, but also often hints at a likely slowdown or sharp increase in the price of bullion.
Let's look at what happened last 4 times in the last 20 years when the ratio went from 80+, down to the critical level of 70 - exactly where the ratio is at right now.
We can see that the Gold/Silver ratio almost always bounces back from 68-70 zone when it falls from 80+ (with 1 exception in 2009 where it overstretched a little and consolidated, but the outcome was still a correction in Silver as you will see below).
Below are the instances that show what happened to Silver when the ratio fell to 70 and bounced back up towards 80.
1. July 2003 to Sept 2003: Silver corrected about 6%
After posting a Year-to-date (YTD) gain of 18-20%, Silver corrected about 6% before rallying further. The correction lasted for around 2 months.
2. Feb 2009 to Apr 2009: Silver corrected about 18%
After posting a YTD gain of 28-30%, Silver corrected about 18% before rallying further. The correction lasted for around 2 months.
3. Feb 2016 to Jan 2018: Silver corrected about 22%
After posting a YTD gain of about 45%, Silver corrected about 22% before falling further. This 22% correction lasted 20 months (almost 2 years).
4. Feb 2021 to Jan 2022: Silver corrected about 19%
After posting a 125% gain from Pandemic low, Silver corrected about 20% before falling another 20% in the following months. This 20% correction lasted 12 months (almost 1 year) and further 20% correction took another 10 months.
Finally, this is where we are right now after Silver posting 100% gain in 2025.
What does this mean for you?
A] If you're an Investor invested in Silver:
We are approaching a time to potentially reduce Silver exposure (if this makes sense with capital gains, etc.) Gold may be preferred over Silver for next few months.
Why? Because in the 4 instances in 20 years, where Silver corrected roughly 20% most of the time, Gold did not correct as much. This makes sense as Gold/Silver bounces from 70 to 80, it means Gold is outperforming Silver. If your view is decadal and you wish to ride out the correction, well, do nothing.
B] If you're an Investor wanting to invest in Gold or Silver:
Consider waiting till you find a dip. That dip hasn't come all 2025, but it is highly likely it will now soon, as indicated by 20 years of data.
C] If you're a trader:
From a weekly to monthly positional viewpoint, this is probably the time to avoid or reduce position size on upside, and keep an eye out for downside reversals. For trade durations of hours to a few days also, I would still look out for opportunities with downside bias and reduce position size for upside trades.
If this is helpful and you want a deep dive into any aspects, or want specific related analyses, feel free to drop a comment.
These views are for educational purposes only and are not financial advice; please consult your licensed financial advisor before making any investment decisions.
Trade/invest with poise.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.