The gold-silver ratio, a key indicator for precious metals investors, has recently plummeted to around 64, a level not seen since the early 2010s. This sharp decline from a recent high of 107 in April 2025 has sparked debate among experts and investors: Is it time to book profits in silver, or does the white metal have further room to run?

Understanding the Gold-Silver Ratio

The gold-silver ratio represents the number of silver ounces required to purchase one ounce of gold. Historically, this ratio has fluctuated, with an average range of 40:1 to 60:1. A high ratio suggests that silver is undervalued compared to gold, while a low ratio indicates that gold may be relatively cheaper. The recent compression of the ratio signals a potential shift in the relative value of these precious metals.

Silver's Stellar Performance in 2025

Silver has significantly outperformed gold in 2025. As of late December 2025, silver prices have surged by approximately 150% year-to-date, reaching levels above $70 per ounce. In comparison, gold has risen by around 72%. This impressive rally in silver prices can be attributed to several factors:

• Industrial Demand: Silver's extensive use in industries such as electronics, solar panels, and electric vehicles has fueled demand. The green energy transition, in particular, has significantly increased silver consumption.
• Supply Constraints: Silver mine production has struggled to keep pace with rising demand, leading to supply deficits. The cumulative supply deficit over the past five years has reached nearly 800 million ounces, further supporting price increases.
• Investment Demand: Increased investor interest, driven by inflation concerns, expectations of lower interest rates, and geopolitical uncertainties, has also contributed to silver's price appreciation. Global inflows into silver-backed ETFs have surpassed 95 million ounces.

Expert Opinions: To Book Profit or Not?

The decline in the gold-silver ratio to around 64 has prompted varied opinions from market experts. Some analysts suggest that the ratio indicates a rising risk of profit-booking in silver. The significant surge in silver prices this year may warrant a cautious approach, as the metal might be technically overbought.

However, other experts believe that silver's rally has more room to run. Kaveri More, a Commodity Analyst at Choice Broking, suggests that ratios below 70 historically favor silver due to its industrial demand dynamics. Ajay Suresh Kedia, the founder and director of Kedia Advisory, expects silver prices to potentially hit $100 per ounce over the next three years. He considers any pullback in silver prices as a correction rather than a trend reversal, given the supportive factors of inflation, fiscal stress, and real-rate uncertainty.

Strategic Implications for Investors

The evolving gold-silver ratio presents both opportunities and risks for investors. The key is to have a well-balanced allocation strategy. For investors considering rebalancing their portfolios, a 60/20/20 portfolio strategy – allocating 20% to both gold and silver – has gained traction in 2025 as a resilient hedge against economic uncertainty.

• Monitor the Ratio: Regularly track the gold-silver ratio using reliable financial sources.
• Consider Gradual Adjustments: Above 80, silver may be undervalued, suggesting an opportunity to increase silver positions. Below 60, gold might offer better relative value, prompting a focus on gold acquisitions.
• Diversify and Rebalance: Maintain a diversified portfolio, using gold as a core hedge and silver as a tactical growth component. Rebalance periodically based on market conditions.

Conclusion

The decline in the gold-silver ratio to 64 reflects silver's exceptional performance in 2025, driven by robust industrial demand, supply deficits, and strong investment inflows. While some analysts suggest caution and potential profit-booking, others believe that silver's rally has further room to run, with potential targets as high as $100 per ounce. Ultimately, investors should carefully monitor the gold-silver ratio, consider their risk tolerance and investment horizon, and implement a well-diversified strategy to navigate the evolving precious metals market.