The Silver Sacrifice: What the Gold–Silver Ratio Signals for Investors Now

The futures price exhaustion was evident. These were signs of a strong reversal, indicating the potential for exhaustion in gold and silver futures, as both had tested record highs this year.

Post the advance warning signal, what followed next by end of Jan’26 was a steep fall in both Gold and Silver testing lows of $4700 and $74 respectively.

At present gold-silver ratio (GSR) ranges around 60, recovering from 46, after a period of extreme volatility and crash in the bullion pack.  Silver was indeed in an overbought zone while typically signaling that Silver significantly outperformed gold and is now trading in the Gold Silver Ratio’s historical long term average range of 60-65 with just a moderate overbought levels for silver.

Silver and Gold could witness continued upside rallies, but these GSR levels serve as a pivot point to rotate holdings from Silver into Gold, as gold is relatively cheaper when compared at GSR levels of 60 or below.

The "mean reversion" expected the ratio to rise again from 46 levels, which indeed happened. The outcome was with a sacrifice of Silver’s price crash and now it’s time for Gold to outperform Silver in the coming months.

Key Signals

• Silver - (The Profit-Taking Signal): Historically, when the ratio drops below 60, it’s time to book profits or rebalance portfolios to avoid sharper drop due to higher volatility.
• Gold – (The Relative Value Signal): A GSR of 60 or below is where gold appears to be better positioned for risk-reward. One should commence accumulation.

Silver’s Market Sentiment - From the high GSR levels of 109 during Aug’25 the sentiments were indicative for a GSR correction. The market sentiment of the falling GSR towards 60 levels strengthened the fundamentals of a strong industrial demand. The overvaluations occurred with sharp decline from GSR 60 to GSR 46 levels leading to a crash.

Trading Strategies - The 80/60 Rule: A common strategy is to buy silver when the ratio is above 80 and rotate into gold when it falls below 60.