Insights/Precious Metals
Precious MetalsApril 2026 · 7 min read

The Gold/Silver Ratio: A 2000-Year Old Trading Signal

Return

+1058%

Win Rate

88%

Trades

8

Sharpe

0.32

Clone Strategy →

The Thesis

The gold/silver ratio measures how many ounces of silver buys one ounce of gold. The historical average is around 60. When the ratio exceeds 75-80, silver is historically undervalued and tends to outperform.

The Strategy

Entry: Buy silver when the gold/silver ratio exceeds 75

Exit: Sell when the ratio drops below 60

Stop Loss: 10%

Historical Context

  • **Normal range:** 50–70
  • **Silver cheap:** 75+
  • **All-time high:** 126 (March 2020 during COVID)

    • Notable Trades

  • **2003** (ratio ~80): Silver $4.50 → $14 (+211%)
  • **2008** (ratio ~84): Silver $9 → $49 (+444%)
  • **2020** (ratio ~126): Silver $12 → $30 (+150%)
  • **2025** (ratio ~85): Silver $24 → $70+ (+191%)

    • Key Insight

    This signal only triggers a few times per decade. But when it does, the moves are massive. Silver's industrial demand (solar, EVs, electronics) plus monetary demand creates explosive rallies.

    Try this strategy yourself

    Clone it, modify the parameters, and backtest against 25 years of data

    Open in Strategy Builder← More Insights

    Backtested results are hypothetical. Past performance does not guarantee future results. Not financial advice.