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Chart of the Week: Gold to Silver Price Ratio


This week we decided to look at the price ratio between the COMEX price of gold and silver since 1975. Over this period, the average gold to silver price ratio has been 58.194 with a range of between 14.569 and 101.7.

The lowest ratio between Gold and Silver (1975 to present) occurred on January 02, 1980 when gold prices were just 14.569 times the price of silver (566:38.85). The major factor for this narrowing in the gold to silver ratio was the price rise in the silver market due to the attempted cornering of the market by the Hunt Brothers.

Between 1979-80, the price of silver rose significantly from $6/oz. at start of the 1979 to a peak of $48.7/oz. - 712% increase in the price. It was believed that over this period the Hunt Brothers had a acquired 1/3 of the non-government market. Over this same period, gold had risen 253%.

The silver boom wouldn't last as the price of silver plummeted in the spring of 1980 - prices fell 64.5% between the start of March and the end of April. Over this period, the gold to silver price ratio jumped up to 40.56 and was the start of a huge rally for gold vs. silver, which would ultimately lead to a peak gold to silver ratio of 101.7 on February 27, 1991 when silver prices fell to just $3.57 oz.

 

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