Gold-Silver Ratio Sees Significant Rebound

Key Highlights

• The gold-silver ratio has surged to around 64.20 in March, up from below 45 in January.
• Spot gold prices gained 2% to $4,466.38 per ounce, while US gold futures for April delivery rallied 1.9% to $4,461.
• Spot silver price rose 3.1% to $70.10 per ounce.

Gold-Silver Ratio Explained

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

The gold-silver ratio measures the number of ounces of silver required to purchase one ounce of gold. It is calculated by dividing the price of gold by that of silver. A higher ratio signals gold outperforming silver, while a lower ratio indicates stronger performance by silver.

Market Analysis

The recent rise in the gold-silver ratio suggests a shift in investor preference toward gold, with analysts expecting this trend to continue in the near term. Market participants anticipate the ratio could climb to 75, implying further relative weakness in silver prices.

Investment Implications

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

Ajay Kedia, Director at Kedia Advisory, expects the gold-silver ratio to rise to 75 over the next six months. He pegged support levels for gold at $3,450–$4,000 per ounce, while silver is likely to find support around $50 per ounce.

Commodity Market Outlook

The surge in crude oil prices amid escalating geopolitical tensions is likely to keep inflation elevated and weigh on global growth. This is negative for silver, which has already seen sharp profit booking from recent highs. Jigar Trivedi, Senior Research Analyst at IndusInd Securities, expects gold prices to continue outperforming silver in the near term, with key levels for gold seen at $4,000 per ounce as support and $4,600 per ounce as resistance in the short to medium term.