On September 26th, 2010, we released a Chart Blog showing a Gold/Silver ratio that was 60.34, and specified that silver has outperformed gold in the market by far. Now, a few months later, we return to the same graph, only to show a different Gold/Silver ratio of 46.96!
Historically speaking the Gold/Silver ratio has been around 12, meaning 1 ounce of gold is equal in value to 12 ounces of silver.
If you take into account how gold and silver have both gone up dramatically in the past year and are likely to continue rising, silver should continue to outperform gold. The Gold/Silver ratio will continue to fall, as it already has by dropping from 60 to 47 in just four months! But still, silver still has a long way to go to reach the historical Gold/Silver ratio of 12.
As well as gold has been performing, silver has really shone when it comes to return on investment, outperforming gold, and nearly any other investment. So keep this graph in mind, and keep an eye on the ratio, because, according to history, the ratio will only continue to fall in favor of silver.
Link:
http://wealthcycles.com/blog/2011/02/02/goldsilver-ratio-falls-as-silver-rises
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