The Most Interesting Thing You'll Read About The Gold/Silver Ratio All Day

A lot is made of the fact that the silver:gold ratio is very low, and that silver would need to come down a lot (relative to gold) to get back in line with historical ratios.

But usually that discussion looks back a few decades.

Deutsche Bank’s Daniel Brebner goes a bit further. Actually a lot further. Actually through the history of time, since the formation of the earth’s crust.

  • From the 12th to the 17th century, the gold/silver ratio held reasonably constant at about 12:1.
  • Isaac Newton monetized silver and set the ratio at 15.5 early in the 18th century and this held until 1873.
  • In terms of relative abundance in the earth’s crust, silver exceeds gold by a ratio of about 18.75.

Since the current ratio is in the 30s, silver could rally A LOT more, relative to gold, to get back to old history.

Silver Gold Ratio

Photo: Deutsche Bank

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