The Gold Silver Ratio vs. The Silver Gold Sales Ratio

The Silver To Gold Sales Ratio

The gold price vs the silver price determines the gold silver ratio. The silver gold sales ratio reflects the amount of silver sold relative to gold sold.

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In a recent blog post Twelve Ways Silver is Different Than Gold we noted silver’s lower price relative to gold has been based on its relative abundance to gold. The traditional gold/silver ratio is 16:1, meaning historically it took sixteen ounces of silver to buy one ounce of gold or one ounce of gold to buy sixteen ounces of silver.

Over the last ten years, however, the ratio has ranged from 31.68:1 to 83.73:1. The current gold/silver ratio is about 60:1. .

Since the financial crisis of 2008, physical gold and silver coin sales at the U.S. Mint have increased significantly. Below is a chart that shows the sales of U.S. gold and silver eagle one ounce coins by year, starting in 2008 through 2013 year to date.

Piece 1 Piece 2
Source: U.S. Mint
*totals determined by taking the yearly average price per ounce X #ounces sold; per ounce values do not include fabrication charges and other premiums.

You’ll notice that while the gold to silver ratio remains near historic highs and well above the historic 16 to 1 ratio, sales of silver have skyrocketed to achieve parity to gold in terms of dollar value sold.

Another important less followed ratio -the Smaulgld silver/gold sales ratio– has increased dramatically. Customers are buying nearly 60 times more ounces of silver than they are of gold – more than double the approximately 25 times more silver than gold customers were buying in 2008.

The silver/gold sales ratio is accelerating. In August of this year, the U.S. Mint sold 3,625,000 one ounce silver eagles and 9,000 one ounce gold eagles – a silver/gold sales ratio of 402 to 1.

Month to date in September 2013, the U.S. Mint has sold 1,143,000 one ounce silver eagles and 2,500 one ounce gold eagles for a silver/gold sales ratio of 457/1.

Click to see updated monthly tracking of the silver to gold sales ratio per U.S. Mint American Gold and Silver Eagle sales

While silver is more abundant than gold, much of it does not get recycled and it is being purchased in physical form in amounts that far exceed its relative abundance to gold.

This excessive relative demand for physical silver to gold bodes well for the price of silver to start closing the gap on the gold/silver price ratio in the coming months.

The Gold/Silver Price Ratio vs. The Smaulgld Silver/Gold Sales Ratio

piece 3
Source: U.S. Mint

Silver is trading below its 1980 all time high. Can you think of anything that costs less today than it did in 1980?

See also 12 Differences Between Gold and Silver.

You can purchase physical gold and silver online by clicking here.

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Further Reading:

US Mint Monthly Gold and Silver Sales- Silver to Gold Sales Ratio Archives

The Gold Silver Ratio

Smaulgld Silver Buying Guide

Smaulgld Gold Buying Guide

Gold and Silver Price Manipulation – Suspected

Gold and Silver Manipulation – Actual

> Royal Canadian Mint

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