The gold/silver ratio is the number of ounces of silver it takes to buy one ounce of gold. It is calculated simply by dividing the price of gold by the price of silver, both quoted in US dollars per troy ounce. The ratio is a long-standing way to compare the relative value of the two metals at a glance.
How Is the Gold/Silver Ratio Calculated?
Divide the gold price per ounce by the silver price per ounce. Because both metals are quoted in US dollars per troy ounce in the London market, the result is a clean, unitless number.
For example, if gold is $2,000 per ounce and silver is $25 per ounce, the ratio is 80 — meaning one ounce of gold is worth eighty ounces of silver at those prices.
What Does the Ratio Indicate?
The ratio shows how the two metals are priced relative to each other rather than the absolute level of either. A higher ratio means gold is comparatively expensive against silver; a lower ratio means silver has gained ground on gold.
Because both are priced per troy ounce — the standard trading unit, equal to about 31.103 grams — the ratio is a convenient single figure for tracking that relationship over time.
How Is the Gold/Silver Ratio Used?
Market participants watch the ratio as a quick gauge of relative value between the two metals. Some use shifts in the ratio as one input when weighing exposure to gold versus silver.
It is a comparative reference point, not a prediction — the ratio tells you where the two prices sit relative to each other, not where either is headed.
Related Terms: Loco London, Contango, Troy Ounce, Bullion, Fineness. See the full glossary for more.
This is educational content, not financial or trading advice.