The gold-silver ratio is the spot gold price divided by the spot silver price, expressing how many ounces of silver are required to buy one ounce of gold. Because roughly half of silver demand is industrial while gold is dominated by investment and reserve demand, the ratio functions as a relative-value and risk-appetite gauge across the precious metals complex.
A rising ratio usually indicates gold outperformance and a defensive tone, while a falling ratio suggests reflationary or cyclical conditions favouring silver. It is a spread rather than a valuation, with no level it must revert to, and the long-run average has shifted across monetary regimes — which is why mean-reversion trades based purely on a historically extreme reading have repeatedly proved expensive.