THE GOLD-SILVER RATIO

Today, one can basically say that gold is rather undervalued in comparison to the Dow Jones and to Oil, and so still has to make up leeway in the future.
And what is clear either is that gold takes silver in tow in a bull market.
That is why it makes sense to compare both metals witch each other because gold is kind of silvers’ big brother and silver is not called “Poor Man’s Gold” for nothing.
The old Egyptians already calculated a gold/silver ratio of 13, a few thousand years ago.
This ratio – you had to spend 13 silver ounces for one gold ounce – was a popular norm for a very long period of time.
During the time of the industrialization from 1792 till today, the average gold/silver ratio was at 31.
From the beginning of the 1980’s, the ratio was at 16.2 , which means that you had to spend 16.2 silver ounces with a value of 52,5 USD (US Dollars) each peace, to receive a gold ounce worth 850 USD.
And what does it look like today? With current gold- and- silver prices of 850 and 13 USD, you must spend 65 silver ounces to buy one gold ounce.
As a result, one can see that silver is strongly undervalued and consequently a good bargain.
It might be possible that the gold/silver ratio comes back down to 13, calculated by the Egyptians a few thousand years ago, and there’s still the possibility to drop below 10.

So what might be the possible target prices in the future?
If gold comes up to its inflation- adjusted high from 1980, when one ounce was worth 2200 USD, silver might easily overrun 150 USD.
But all this is pure calculation. Not to imagine what could happen if gold rises over 2200 USD.  

Also read about: Oil-Silver Ratio , Dow-Silver Ratio , Dow-Gold Ratio , Oil-Gold Ratio