Silver May Be Undervalued Amid Elevated Gold-Silver Ratio

A new study by The Silver Institute has found that the gold-silver ratio remains a useful technical indicator for understanding the silver market and forecasting potential price moves.

The current ratio of approximately 67-to-1 is above its long-run average of roughly 60-to-1, indicating that silver may be undervalued relative to gold.

Historically, when the ratio rises significantly above its mean, silver has rallied sharply as it reverts towards equilibrium. This phenomenon was observed after the 2008 financial crisis and during the COVID pandemic in 2020.

The Silver Institute notes that heavy central-bank gold buying may influence the ratio at times, but its tendency to fluctuate above and below equilibrium remains intact.