Loading ...While others debate chart patterns and momentum indicators, the most reliable metric in precious metals history is screaming that silver’s explosive rally is just the warm-up act.
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H/T CHART BY CRESCAT CAPITAL
Silver has never been viewed as overvalued with the gold-to-silver ratio still sitting at 84:1.
At its two previous bull market highs in 1980 and 2011, the ratio dropped to lows of about 15:1 and 32:1 respectively. It was previously set at 15:1 in 1972. So that range of 15:1 to 32:1 represents silver getting overvalued relative to gold.
Currently sitting near 84:1, silver has never been viewed as overvalued at this level.
The math is simple and the message is clear: silver has a long way to go in this bull cycle still.
The Ratio That Never Lies
The gold-to-silver ratio is the most honest indicator in precious metals markets. Unlike price charts that can be manipulated by paper derivatives or technical indicators that can give false signals, the ratio simply tells you how many ounces of silver it takes to buy one ounce of gold. It’s pure math, and mathematics doesn’t lie.
At 84:1, the current ratio is telling us that silver remains historically cheap relative to gold. This isn’t a matter of opinion or interpretation; it’s objective mathematical reality.
When silver was truly overvalued in previous bull markets, the ratio compressed to levels between 15:1 and 32:1. We’re not even close to those levels, which means silver’s explosive rally from just below $20 to just over $50, and the current settling in around $48, is only the beginning of a much larger move yet to come.
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The top chart makes this crystal clear. Every time the ratio has been at or above the current 84:1, silver has been historically undervalued. Every time it’s dropped below 30:1, silver has been overvalued.
We’re currently in the “silver historically undervalued” zone, which means the recent surge past $50 isn’t the end of the story; it’s the opening chapter.
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