SILVERTRADING How to calculate the ratio
CME defines the ratio using per-troy-ounce prices. With gold at $2,400 and silver at $30, the ratio is 2,400 ÷ 30 = 80. One ounce of gold has the same quoted metal value as 80 ounces of silver, before dealing costs. These prices are illustrative, not current quotes.
Use the same currency, matching timestamps and comparable price types. A stale silver quote paired with a fresh gold quote can produce a misleading reading. A spot-to-spot calculation and a futures-based calculation should be labelled separately.
Three paths from a ratio of 80
Start each example with gold at $2,400 and silver at $30. The resulting ratio tells you about relative returns, not the absolute direction of either metal.
| Later gold | Later silver | Ratio | What changed |
|---|---|---|---|
| $3,000 | $30 | 100 | Gold rose 25%; silver was flat. |
| $2,160 | $21.60 | 100 | Both fell; silver fell further. |
| $2,640 | $33 | 80 | Both rose 10%; neither outperformed. |
The second row is the easy one to misread. Gold lost 10%, yet the ratio rose because silver lost 28%. “Gold outperformed” is correct; “gold went up” is not. The third row shows the opposite trap: a flat ratio can conceal substantial moves in both prices.
Why a high ratio is not a countdown to a silver rally
Calling a ratio “high” requires a reference period and a reason that period is relevant. A value above a chosen historical average does not specify when it will fall, whether it will fall, or which metal would drive the change.
For example, a ratio could move from 100 to 80 with silver unchanged at $30 if gold fell from $3,000 to $2,400. It could also reach 80 with gold unchanged at $3,000 if silver rose to $37.50. The same ratio destination produces very different outcomes for someone holding only silver.
The ratio is not a position-size formula
A price ratio compares one-ounce values. It does not say to trade 80 lots of silver for one lot of gold. To translate an idea into exposure, contract quantities and position sizes must enter the calculation separately. CME's spread lesson distinguishes relative-value analysis from the contracts used to express it.
For XAGUSD research, keep the ratio as context alongside silver's own price behaviour and trading session. The silver guide below explains the instrument, while the market-hours page covers the session clock. None of the numerical examples above is a live spread recommendation or a prediction of fair value.