The Gold-to-Silver Ratio: What is It and Why Does It Matter?

For experienced investors, the gold-to-silver ratio is one of many indicators used to determine the right (and wrong) time to buy or sell their precious metals.

Other factors – including economic uncertainty, inflation frenzy and debt – have encouraged millions to invest in gold and silver, and in the past few years, small-scale investors have begun to climb aboard.

Yet despite these market developments, to many, the gold-to-silver ratio remains a vague, elusive mystery.

So what IS the Gold-to-Silver Ratio and why does it even matter?

Good question. First, a simple definition: Basically, the gold-to-silver ratio is the amount of silver it takes to purchase one ounce of gold.

At the time this was written, the gold-to-silver ratio stood at approximately 50 to 1.

That means, at the current price, it would take 50 ounces of silver to buy 1 ounce of gold.

While there are countless websites providing the current ratio, it’s relatively painless to calculate on your own.

Simply take the price of gold, divide it by the price of silver and Voilà! You have the gold-to-silver ratio.

Here is an example using recent market prices:

$1644 (gold price) ÷ $31.60 (silver price) = approximately 52 (Gold-to-Silver Ratio)

Thanks for the information, but what does it really mean?

For more
http://www.providentmetals.com/knowledge-center/precious-metals-resources/gold-to-silver-ratio-explained.html