iShares Silver Trust (SLV)

[Don'tDrinkTheKoolAid]

What is the gold-to-silver ratio? At its core, this ratio tells how many ounces of silver it takes to buy one ounce of gold. Currently, almost 78.3 ounces of silver are needed to buy one ounce of gold.

In the chart above, there’s something interesting happening over the last 25 years. You see, whenever the ratio hits around 80, it makes a move toward 40. The last time we saw this happen was in 2011.

If we assume that the gold-to-silver ratio drops to 40 again in 2018, then what’s next for silver prices?

If we keep the gold price the same (around $1,280), then the silver price would need to rise to around $32.00 an ounce. This is roughly 93% above the current price.