how does the price of gold correlate with silver?

The price of gold and silver has a strong positive correlation. This means that when the price of gold increases, the price of silver typically also increases, and vice versa. The gold-silver ratio, which expresses the number of ounces of silver needed to equal the value of one ounce of gold, has been used as a benchmark for centuries.

However, the ratio has experienced significant fluctuations throughout history due to various factors such as government intervention, market demand, and supply shocks.

In modern times, the correlation between gold and silver prices remains strong, with a correlation coefficient of 0.91. This indicates that there is a high degree of similarity in the price movements of gold and silver.

Investors often monitor the gold-silver ratio as a way to assess potential investment opportunities in the precious metals market. A low ratio may indicate an opportunity to buy silver relative to gold, while a high ratio may suggest a potential overvaluation of gold.