What Happens to Real Effective Exchange Rate When the Gold-Silver Ratio Exceeds 90?
Gold-silver ratio above 90 signals industrial or financial stress. What happens when gold dramatically outpaces silver, a classic late-cycle warning?
How Real Effective Exchange Rate Responds
Scenario Background
The gold-silver ratio measures ounces of silver per one ounce of gold. The long-run historical average runs 50-70, but has ranged from 15 (1980) to 125 (2020 COVID). A ratio above 90 signals that gold is dramatically outperforming silver, typically indicating either financial stress (flight to monetary metal) or industrial weakness (silver has 50% industrial demand).
Read full scenario analysis →Historical Context
The gold-silver ratio exceeded 90 during 1991 (peak 100), 2003 (peak 80+ briefly), 2016 (85), 2019-2020 (peak 125 in March 2020), and 2022-2025 (peaked near 95 multiple times). The March 2020 peak at 125 was the highest on record, driven by silver industrial demand collapse during COVID. The subsequent silver rally from $12 to $28 produced a 130% return in five months. The 2016 episode saw gold-silver peak near 85, followed by silver outperformance of 30% over the subsequent year. Historically, ...
What to Watch For
- •ISM Manufacturing rising above 50 confirming industrial recovery
- •Silver ETF holdings rising (investment demand returning)
- •Real yields declining (both metals rally, silver beta higher)
- •Chinese industrial data improving
- •Solar installation data accelerating
Other Assets When the Gold-Silver Ratio Exceeds 90
Other Scenarios Affecting Real Effective Exchange Rate
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