Gold-to-Silver Ratio
InvestmentsThe gold-to-silver ratio shows how many grams of silver it takes to buy one gram of gold. A high ratio (silver cheap relative to gold) historically signals silver is undervalued. Indian investors use this to time between gold and silver ETFs.
In detail
Historical ratio averages 50-80x. When ratio exceeds 80x: silver relatively cheap, consider adding silver exposure. When below 50x: silver expensive relative to gold. In India, silver is accessible via silver ETFs (launched 2021), multi-asset funds, or physical silver.
Formula
Gold:Silver ratio = Gold price per gram / Silver price per gram
If gold = Rs 6,500/gram, silver = Rs 80/gram: Ratio = 81x (silver relatively cheap)
Real-life example
🇮🇳 India example
In 2020, ratio touched 120:1. Investors who shifted 20% of gold ETF to silver ETF saw silver return 140% vs gold's 25% over 18 months as ratio normalised. Tactical allocation added approximately 2% to overall portfolio return.
Frequently asked questions
Can I invest in silver ETFs in India? ▼
Yes. SEBI approved silver ETFs in 2021. AMCs including Mirae, Aditya Birla, and ICICI Prudential offer them. Traded on exchanges like stocks. No GST on silver ETF (unlike physical silver at 3% GST).