Less Glamorous

Gold hasn’t quite matched the post-crisis surge in equities since “liberation day” in April, but then again, it also never plunged by 25% in the first place. After finally breaking through the $2,000 barrier that acted as resistance for nearly fifteen years, Gold has nearly doubled over the last eighteen months.

Its rise has been fuelled by economic uncertainty, stubborn inflation, and a global hunt for safe-haven assets. The question is, can it climb higher, and what does that signal about the state of the world? To explore that, it helps to look at Gold’s less glamorous cousin, Silver, which has been known to act as a useful leading indicator.

It all has to do with buying an ounce of one versus the other and overlaying that ratio with past economic cycles. During the last hundred years, the “normal band” is between 60-70. However, during times of crises, the ratio tends to widen and in 1939, 1991, 2020, and briefly in April 2025, it climbed above 100. 

Today the ratio sits at 81. That’s good, because it’s well below the extremes, suggesting we’re not in a fresh systemic shock. That’s bad, because if markets aren’t in crisis, the case for piling into non-yielding safe haven assets weakens. That’s ugly, because while Gold is up 48% this year, we should have bought more Silver, which has gained 68%.