Will Silver Outperform Gold Now?

Silver may be entering a phase where it outperforms gold.

(Photo: iStock)

Silver may be entering a phase where it outperforms gold.

At least that’s what the historical ratio analysis between the prices of the two precious metals suggests. The gold-silver ratio stands at near 80. What it means is that 80 ounces of silver are needed to buy one ounce of gold, a historical resistance level.

The ratio topped 80.45 in May 2003 and fell to 46.4 in November 2006. During the period, gold returned 78 percent while silver rose 208 percent.

Between November 2008 and April 2009, the ratio again tumbled from 79.3 to 32.6. Silver gained 365 percent in that phase compared to 91 percent rise in gold.

Moreover, the current gold-silver ratio is also off the long-term moving average of 61.5.

Will the trend hold this time?

(This article was first published on BloombergQuint.)

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