After a week of significant price swings, the international precious metals market has settled with gold at $4,345.50 per ounce and silver at $71.30 per ounce. This movement has pushed a key market indicator, the gold-silver ratio, to approximately 60, a notable increase from a low of 54 recorded just on Monday. This shift is prompting financial experts to reassess the attractiveness of these two popular investment avenues, especially with bullish sentiment also surrounding industrial metals like copper and aluminium.
What Does a Gold-Silver Ratio of 60 Signal for Investors?
Decoding the implications of this ratio, Amit Goel, Chief Global Strategist at Pace 360, provided clear guidance. He identifies 80 as the critical pivot point for the gold-silver ratio. "When the ratio drops below 80, it suggests silver prices are entering an overbought territory. Conversely, a ratio above 80 indicates gold is in the overbought zone," Goel explained.
With the current ratio standing slightly above 60, the analysis is straightforward. "This indicates that silver rates today are in the overbought zone. One should avoid buying the white metal in the current market scenario," advised Goel. This metric serves as a crucial tool for investors deciding where to allocate funds between the two precious metals.
Is Now the Right Time to Invest in Gold?
According to Pace 360's strategist, the present conditions are favourable for gold. The ratio's climb from 54 to 60, while still being 20 points away from the pivot point of 80, suggests room for further movement. "Therefore, investors are expected to shift funds from silver to gold, as silver is currently in the overbought zone and profit-booking may occur at any time," Goel stated, highlighting a potential rotation in investment flows.
This technical view is bolstered by strong fundamental factors. Sugandha Sachdeva, Founder of SS WealthStreet, points to a profound transformation in how gold is perceived. "Gold is undergoing a major structural re-rating, transitioning decisively from a peripheral hedge into a mainstream core asset for portfolio allocation," she said.
Sachdeva elaborated that gold is now valued not just as a crisis hedge but for its returns, stability, and diversification benefits, particularly as a shield against inflation, currency devaluation, and geopolitical risks. "This shift reflects a broader loss of confidence in fiat systems," she added.
The Rising Institutional Demand Driving Gold's Appeal
A key driver behind this transformation is the aggressive action of central banks worldwide, which are diversifying reserves away from the US dollar and towards gold. Sachdeva noted that demand is experiencing a "tectonic shift," with even non-state entities like Tether making bulk purchases.
This institutional demand is expanding through regulatory changes. "In India, a landmark regulatory change has allowed the National Pension System (NPS) to allocate up to 1% of its assets to gold and silver ETFs," Sachdeva highlighted. This move alone could generate incremental demand of nearly $1.7 billion for precious metals.
A similar trend is visible in China, which in 2025 permitted its pension funds to allocate up to 1% of their portfolios to gold. These developments are significantly broadening the base of institutional demand for the yellow metal, providing a strong, structural support to its price.
Key Takeaways for Investors
- The gold-silver ratio has risen to 60, suggesting silver is overbought and pointing to a potential investment shift towards gold.
- Gold is being re-evaluated as a core portfolio asset due to its stability and returns amid economic and geopolitical uncertainty.
- Institutional demand is growing robustly, fueled by policy changes in major economies like India and China, creating a solid demand floor for gold prices.
For investors navigating the volatile commodities market, the current signals suggest a prudent review of asset allocation, with experts indicating a favourable outlook for gold in the near term.
