Claim check: The gold/silver ratio reverts
“The gold/silver ratio reverts: when it is high, silver is the buy.”
What the data says
Does not hold Not supported by the data: in Gold/silver ratio, the 63-day return after “Gold/silver ratio more than 2 standard deviations above its 252-day average” averaged -1.4% against +0.7% for all days, from 17 independent events (t = -1.4, likely noise). The direction points the claimed way, but the result cannot be told apart from chance.
No effect we can tell from chance, or the opposite effect.
Who says it
Precious-metals dealers and Reddit r/Silverbugs.
Origins are as commonly cited and were not independently verified.
How we tested it
Ratio = GLD close divided by SLV close. Event: the log ratio is more than two standard deviations above its trailing 252-day mean. We record the change in the ratio over the next 63 trading days (events at least 63 days apart) and compare it with the average 63-day change. If the ratio reverts, it should fall by more than usual, which would make silver the better buy.
Results
Gold/silver ratio more than 2 standard deviations above its 252-day average 63-day (claim: lower than average)
| Market | Events | Mean after | All days | Difference | Median after | Up share | t-stat | Reading |
|---|---|---|---|---|---|---|---|---|
| Gold/silver ratio | 17 | -1.4% | +0.7% | -2.1% | -2.4% | 35% | -1.4 (likely noise) | Right way, likely noise |
Difference from the average, by market (63-day)
By horizon: mean difference from all days
| Market | 21-day | 63-day | 126-day |
|---|---|---|---|
| Gold/silver ratio | -0.5% (32) | -2.1% (17) | -5.1% (13) |
Average -day return after the signal vs all days (Gold/silver ratio)
Stability across the two halves of history
A saying that only works in one half of the history is not much of a rule. Each row shows the effect in the full history, the first half and the second half; green means the claimed effect was present.
| Market | Full history | First half | Second half |
|---|---|---|---|
| Gold/silver ratio | -2.1% (17) | -1.4% (8) | -2.6% (9) |
The honest caveat
Silver and gold ETF prices embed trends; ratios can persist for years.
Descriptive statistics from historical data, before costs. Not a forecast and not investment advice.
Questions
The gold/silver ratio reverts: when it is high, silver is the buy.
Not supported by the data: in Gold/silver ratio, the 63-day return after “Gold/silver ratio more than 2 standard deviations above its 252-day average” averaged -1.4% against +0.7% for all days, from 17 independent events (t = -1.4, likely noise). The direction points the claimed way, but the result cannot be told apart from chance.
How was this claim tested?
Ratio = GLD close divided by SLV close. Event: the log ratio is more than two standard deviations above its trailing 252-day mean. We record the change in the ratio over the next 63 trading days (events at least 63 days apart) and compare it with the average 63-day change. If the ratio reverts, it should fall by more than usual, which would make silver the better buy.