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MarketWatch: Making Sense of the Gold/Silver Ratio

LONDON, 19 July 2011 - Comments from online gold and silver trading and ownership service BullionVault feature today in a detailed examination of the "Gold/Silver Ratio" by MarketWatch, the US financial news website.

The Gold/Silver Ratio is a measure of the two metals' price-strength relative to each other. It simply divides the gold price by the silver price, rising when gold rises faster than silver and vice versa.

"Traders can expect silver to make more exaggerated moves than gold," says MarketWatch columnist Myra Saefong. But "Gold prices have outpaced silver amid the current debt-deflation scare in the US and Eurozone, as well as during the financial panic immediately after Lehman's collapse," she quotes Adrian Ash, head of research at BullionVault.

Why? Because "When gold's gains outpace silver, it shows that store of value is more highly prized than industrial use," Adrian continues. "In 2010, industrial use accounted for 11% of total gold demand, but accounted for more than 60% of silver demand worldwide."

You can read the full report at MarketWatch here...

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